Iraq has shown more willingness to co-operate with OPEC as the plunge in oil prices – down 50 percent since 2014 – and the fight against Islamic State battered its finances.
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Brent for October settlement lost as much as 80 cents, or 1.6 percent, to $49.12 a barrel on the London-based ICE Futures Europe exchange.
West Texas Intermediate for October delivery was at US$46.25 (RM246.72) a barrel on the New York Mercantile Exchange, down 10 USA cents, at 9.58am.in Hong Kong.
Crude oil futures fell in early trade on Wednesday as the U.S. dollar held around three-week highs and industry stocks data indicated a build in U.S. crude inventories. A weaker dollar makes oil and other commodities denominated in the greenback more affordable for holders of the euro and other currencies.
The EIA is anticipated to report a 1.31 million barrels gain in U.S. crude stocks in the latest week. That method has now been disabled. However, Smith said the meeting could thwart those hopes for a production freeze, noting Saudi Arabia’s crude production recently hit a record high. The International Energy Forum, comprising 73 countries that account for about 90 per cent of the global supply and demand for oil and natural gas, will meet in the Algerian capital on September 26-28.
Oil rose yesterday after dropping the most in a month as Saudi Arabia said it will not boost output to capacity and flood a market that is contending with a global inventory overhang of crude and fuel supplies.
The rebalance the market so desperately needs will depend on a number of factors; continued oil demand being one of them.
“We are with freezing production at the Opec meeting”, he said, in the clearest indication yet about the position Iraq will support when the oil exporters’ group meets next month.
The expert added that the largest oil producer in OPEC – Saudi Arabia, where the structure of deposits differs from that in other countries, is not interested in oil price of $100 a barrel.
According to OPEC’s latest figures, Saudi Arabian oil production in July, the last full month for which OPEC has data, was 2 percent higher than in May when the IEA mentioned a return to balance.
Hints that the U.S. Federal Reserve could soon raise interest rates had also been a drag on oil in recent days.
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For Nigeria, this may impact positively on its fortunes amidst the downturn of its economy, following incessant attacks on facilities which has dropped production drastically to a lower level.
