Sun, Nov 06, 2016 - Page 14 News List

Oil suffers largest weekly decline since January on doubts over production cuts


Oil capped the biggest weekly loss in about 10 months as hopes faded that OPEC will be able to implement a promised deal to cut production and ease global oversupplies.

Futures dropped 1.3 percent in New York, bringing the six-session decline to 11 percent.

Prices on Thursday closed at the lowest level since OPEC reached a preliminary accord in Algiers for the cuts and on Friday extended losses after Reuters reported that Saudi Arabia threatened to raise output if other members didn’t agree to cuts.

Oil has retreated below US$45 per barrel this week following OPEC’s failure on Oct. 28 to agree on output quotas for member countries, which must happen before a deal can be finalized.

While Goldman Sachs Group Inc saw little probability of an agreement at a Nov. 30 meeting, Bank of America Merrill Lynch and Citigroup Inc said an accord is likely.

OPEC pumped a record 34.02 million barrels a day last month, according to Bloomberg estimates.

“We’re not seeing any path for an OPEC agreement,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “There’s too much output growth in OPEC outside of Saudi Arabia. It’s asking too much of Saudi Arabia and its Gulf allies to make the cuts needed for this to work.”

West Texas Intermediate for December delivery on Friday dropped US$0.59 to settle at US$44.07 per barrel on the New York Mercantile Exchange. It is the lowest close since Sept. 20. Total volume traded was 28 percent above the 100-day average at 2:47pm.

Prices slipped 9.5 percent this week, the most since the period ending Jan. 15.

Brent for January settlement on Friday fell US$0.77, or 1.7 percent, to US$45.58 per barrel on the London-based ICE Futures Europe exchange. It is the lowest close since Sept. 1.

Prices dropped 8.3 percent this week.

Oil market news:

‧ Rigs targeting crude oil in the US rose by nine to 450, the highest level since February, Baker Hughes Inc said on its Web site on Friday.

‧ Oil producers in the North Sea are next month poised to ship the most crude oil in more than four years, according to data compiled by Bloomberg.

‧ Colonial Pipeline Co said it is on target for today’s restart of the pipeline’s 1.3 million-barrel-per-day main gasoline line.

‧ US crude stockpiles last week rose by 14.4 million barrels as imports surged the most in about 20 years, according to a US Energy Information Administration report on Wednesday.

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