After more than a year of the OPEC cartel being unable or unwilling to cut production to strengthen prices, Gene McGillian of Tradition Energy remained cautious about the report that Iran was reversing its stance and would work together with the rest of the group in their coming meeting next month.
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Brent for October settlement lost as much as 89 cents, or 1.8 percent, to $49.07 a barrel on the London-based ICE Futures Europe exchange.
Russia, which in April was ready to freeze production, now wants to see an internal agreement among OPEC before it commits to rejoining an initiative.
“Oil prices are on the back foot as the oversupplied outlook trumps any hopes of coordinated producer action to support the market”, oil brokers PVM said in a note to clients on Tuesday.
WTI crude gave back most of its 1.5% overnight gain in Asia hours, down 1.1% to $47.56 per barrel, after API data showed a big surprise build in US crude stocks. “A production freeze would also likely prove self-defeating if it succeeded in supporting oil prices further, with the US oil rig count up 28 percent since May”. The U.S. government will publish its own weekly crude stocks data at 1430 GMT on Wednesday. It pumped 3.6 million bpd in July, OPEC figures show.
Baku, Fineko/abc.az. The global oil prices are marking at $50 a barrel, the U.S. oil industry fluctuates in the oil export zone and the American price advantage in the market as well.
“Even with OPEC and Russian collusion to freeze production, crude oil supply would still be in abundance”.
“In general, Iran prefers more actions from the OPEC side rather than just freezing at the maximum production level of all members”.
Tehran refused to join an April attempt by OPEC and non-members such as Russian Federation to stabilize production, causing talks to collapse. And “given OPEC’s track record of working together, this seems very unlikely”.
The bank now expects the American benchmark to average $45 a barrel, instead of $52.5 due to 500,000 barrels a day of increased output that could return from previous supply disruptions.
Venezuela, whose economy has been hit hard by the oil price collapse, has for months sought to rally producers towards an agreement to limit production.
If negotiations with militants in Nigeria are successful, that could boost crude production and exports from the country.
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Adding to the supply worry is the continuing deluge of products from China.
