Sun, Oct 30, 2016 - Page 14 News List

Oil falls to four-week low as OPEC discusses quotas


Crude oil tumbled to the lowest in about four weeks as an OPEC committee discussed production targets and US equities dropped after the FBI reopened its investigation into Democratic US presidential candidate Hillary Rodham Clinton’s use of an unauthorized e-mail server.

Oil futures fell 2.1 percent on Friday.

Brazil is to attend the OPEC gathering on Saturday next week in Vienna as the bloc that pumps about 40 percent of world output seeks non-member cooperation on curbing production. Brazil is to join other exporters from outside the group, including Russia.

Oil has fluctuated near US$50 per barrel amid doubts about whether OPEC can implement the first supply cuts in eight years at the summit.

The outcome of the group’s committee talks, which would try to resolve differences over how much individual members should produce, will have ramifications for the market in the medium to long term, OPEC secretary-general Mohammed Barkindo said.

He called for members to “forge ahead together” after Iraq this week demanded to be exempt from any cuts.

“Oil traders are reacting to the weakness in the S&P 500,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York.

West Texas Intermediate (WTI) for December delivery dropped US$1.02 to US$48.70 per barrel on the New York Mercantile Exchange. It was the lowest close since Oct. 4 and 4.2 percent lower than last week’s close at US$50.85.

Total volume traded was 16 percent below the 100-day average at 3:03pm.

Brent for December settlement dropped US$0.76 to $49.71 per barrel on the London-based ICE Futures Europe exchange. It was the lowest close since Sept. 30. The contract is 4 percent lower than last week’s US$51.78 per barrel.

The global benchmark crude traded at US$1.01 premium to WTI.

OPEC might agree on a collective cut and postpone “difficult decisions” on individual quotas, analysts Bassam Fattouh and Amrita Sen wrote in an Oxford Institute for Energy Studies report.

A technical meeting in Vienna on Friday ended without a final deal on country limits, but progress was made, a delegate who asked not to be named said.

Oil market news:

‧ The Seaway Legacy crude oil pipeline is expected to resume service late next week after the system that links Cushing, Oklahoma, to the Texas Gulf Coast was shut because of a spill on Sunday last week.

‧ Eni sees the Kashagan oil field in Kazakhstan ramping up to 200,000 barrels per day by the end of this year, Chief Upstream Officer Antonio Vella said on Friday.

‧ Exxon Mobil said it discovered an oil field off the Nigerian coast that might hold as much as 1 billion barrels of crude oil, according to a statement on Thursday.

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