It is even more unlikely considering that Saudi Arabia has chose to increase oil output in August and that Iran seems unwilling to partake in the freeze, even though it would benefit the most from higher prices as the country has high oil production costs.
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The Organization of the Petroleum Exporting Countries will probably revive talks on freezing oil output levels when it meets non-OPEC nations next month, OPEC sources told Reuters, citing Saudi Arabia’s wish for higher prices.
Traders said the price falls were the result of cashing in following more than two weeks of rallying prices.
Oil prices moved higher on Thursday as traders digested the prospects over possible OPEC action amid record high Saudi Arabia’s output.
“Currently the market is very anxious about the large overhang of gasoline stocks”, said Torbjoern Kjus, an analyst at DNB ASA in Oslo.
Prices have roared back to enter a bull market, rallying more than 20 per cent from lows seen earlier this month when they pushed below $ 40 a barrel for the first time since April.
USA crude oil and gasoline stockpiles fell last week, the Energy Department reported.
“Refinery runs hit their highest level for the year to boot”, said Matt Smith of ClipperData.
US crude stockpiles dropped by 2.5 million barrels last week to 521.1 million, the EIA reported Wednesday.
Brent crude settled up 88 cents, or 1.8 percent, at $49.23 a barrel.
West Texas Intermediate for September delivery was at $46.74 a barrel on the New York Mercantile Exchange, down 5 cents, at 11:35 a.m.in Hong Kong.
Nigerian Petroleum Minister of State Emmanuel Kachikwu in a Twitter post Monday also voiced doubts about output cuts by OPEC. Talks on a global oil production level freeze collapsed in April after Iran refused to reduce its output levels.
Weakness in the USA currency has also helped boost the dollar-traded commodity by making it cheaper, encouraging demand.
“The main players – Saudi Arabia and Iran – didn’t even ask for the meeting, it is more the weak members, like Venezuela and Nigeria that are desperate for the others to cut”, said Amrita Sen, oil analyst at Energy Aspects, a consultancy.
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Futures were little changed in NY, paring an earlier loss of 0.9 per cent as the dollar weakened, making commodities more attractive to investors.
