JOHANNESBURG: Oil held near $50 a barrel after Russia cast doubt over a deal any time soon with Opec, following the group’s pledge to reduce output.
Futures were little changed in New York after rising 1.2 per cent Thursday to close above $50 a barrel for the first time since June. Opec agreed in Algiers last week to reduce the group’s production in a bid to shrink the world’s bloated crude supplies and boost prices. Russia’s Energy Minister Alexander Novak said Friday he doesn’t expect to sign a deal with Opec during the World Energy Congress next week in Istanbul.
Oil has gained about 13 per cent since the Organisation of Petroleum Exporting Countries agreed Sept. 28 to cut production for the first time in eight years. Opec, which pumped at a record in September, will decide on quotas at an official meeting of the group in Vienna on Nov. 30. Hurricane Matthew is within miles of the Florida coast and may disrupt East Coast fuel shipments.
“Talks, talks, and talks — that has been the baseline over the last week or so,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London. “There’s no practical indication that Opec will finally agree, meaning fully and credibly, to cut production at the end of the November meeting.”
West Texas Intermediate for November delivery was at $50.37 a barrel on the New York Mercantile Exchange, down 7 cents, at 1.34pm in London. The contract increased 61 cents to $50.44 a barrel on Thursday. Total volume traded was 25 per cent above the 100-day average.
Brent for December settlement fell 18 cents to $52.33 a barrel on the London-based ICE Futures Europe exchange. The contract gained 65 cents, or 1.3 per cent, to $52.51 a barrel on Thursday. The global benchmark crude traded at a $1.44 premium to WTI for the same month.
US crude inventories dropped by 2.98 million barrels to 499.7 million barrels, the Energy Information Administration reported Wednesday. The number of rigs operating in the country in September climbed to the highest since February, rising 28 from a month earlier to 509, according to Baker Hughes Inc.
Eighteen of 32, or 56 per cent, of analysts, traders and brokers surveyed by Bloomberg Thursday were bearish on WTI. That’s up from 50 per cent of respondents a week earlier. Eight of the respondents were bullish on the futures, while six were neutral.