U.S. benchmark West Texas Intermediate for delivery in January was down 20 cents at $41.65 and Brent crude for January was trading 14 cents lower at $44.30 a barrel at around 1000 IST.
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Last time OPEC and non-OPEC joined forces to tackle low oil prices was 15 years ago, soon after the 1998 Asian financial crisis.
“While many investors say they expect no change in OPEC production, the options market is still pricing elevated risk of stock/commodity volatility”, Goldman analysts wrote.
He made the remarks while commenting on its recent letter to the Organization of the Petroleum Exporting Countries (OPEC), in which he asked the cartel to reduce production by at least 1.3 million barrels per day (mbpd), the oil ministry’s SHANA news agency reported December 2.
Iran’s oil minister was quick to dismiss on Thursday the possibility of limiting Tehran’s production ramp up once Western sanctions are lifted.
This year, the expectations are likely to depict a similar scenario when the group meets up on this coming Friday in Vienna, as so what analysts think.
Oil prices have been in retreat from levels above $100 a barrel reached in mid-2014.
OPEC’s historic decision past year to maintain high output to defend market share from other producers such as Russian Federation and US shale drillers, sent oil prices into a spiral. The group, however, has been producing a million more barrels than its ceiling for the past 16 months.
“After the full return of Iran to the market, we are ready to participate with OPEC members for making a new ceiling” on crude production, he said.
“Quantitative easing programs around the world have pushed up prices of risk assets, so it certainly won’t do potential upside for oil too much harm”, said Brun.
In addition, the expected rise in United States interest rates later this month may boost the dollar and make dollar-priced oil more expensive, further denting demand and prices.
The US government’s Energy Information Administration’s inventory report will be published at 1530 GMT (9 p.m.in India). “The fact that it’s a Saudi proposal gives it a bit of extra weight because they are a credible operator in the oil market”.
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“I will be talking with Iran’s oil minister on that so that we can stabilise the price”.
