Reinforcing concerns about market oversupply, US crude stockpiles surprisingly rose last week, even though gasoline inventories fell sharply and distillate stocks drew, data from industry group the American Petroleum Institute showed on Tuesday.
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The Iranian oil minister confirmed Thursday he would attend a meeting in Algeria where some OPEC members may consider artificial market actions.
“OPEC is producing at record high levels and the market is paying them to do it, with the way prices have risen today despite what the Saudi minister said”, said Tariq Zahir, crude trader at Tyche Capital Advisors in NY. The global benchmark crude closed at a $US2.34 premium to WTI.
Brent for October settlement was 11 cents lower at $48.94 a barrel on the London-based ICE Futures Europe exchange.
The price of oil in U.S. dollars today: $47.565, 0.76% higher on the day.
On June 2, OPEC members discussed freezing oil output following the Doha meeting in April after OPEC and major non-OPEC oil producers failed to agree on freezing oil output at January 2016 levels to shore up prices.
Oil prices edged higher on Friday, but the market remained weak as OPEC’s key producers cast doubt on the possibility of cutting output. U.S. West Texas Intermediate (WTI) futures fell 52 cents, or 1.1 percent, to $47.58.
“There is growing realization within OPEC and outside that producers, inside and outside must take more proactive stands in relation to production management in order to complement traditional market force”, he said.
“Iran will cooperate with OPEC on improving prices and the state of the crude market, but we expect our right to restore our lost market share in the market to be considered”, he said, the ministry’s SHANA news service reported. Saudi Arabia recently hit a record in terms of barrels-per-day production, and other member nations, including Iran, have said they will boost output.
Oil held gains as Saudi Arabia’s energy minister said an output freeze would be “positive” if it happens, while ruling out a production cut.
OPEC is scheduled to meet in Algeria from September 26-28, and speculation is rife that the oil cartel, along with the non-OPEC producers like Russian Federation, will join hands and agree to cap oil production, in order to provide stability to the oil markets.
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Jeffrey Halley, a senior market analyst at OANDA, said Wednesday’s decline is due to traders taking advantage of the recent spike to sell positions they had bought earlier in the hope prices would go higher.
