Futures were little changed in New York. Prices rebounded 3.3 percent Monday after dropping Friday by the most in more than two months. The U.A.E. supports a deal to freeze output if other nations agree, but production cuts are not up for discussion, Oil Minister Suhail Al Mazrouei said. Nigerian Minister of State for Petroleum Resources Emmanuel Ibe Kachikwu said “surely there will be” an accord. Prices may tumble below $20 if no deal is reached, according to Venezuela’s oil minister.
According to Bloomberg, oil has fluctuated since rallying in August on speculation major producers will agree on ways to stabilize the market when they meet Wednesday. While Saudi Arabia has offered to pump less crude if Iran caps output, the kingdom doesn’t expect an agreement this week. Freezing output was first proposed in February, but a meeting in April ended withno final accord.
“There’s skepticism creeping in as to whether there will be an agreement at this meeting,” said Angus Nicholson, a market analyst in Melbourne at IG Ltd. “Still, there seems to have been some very strong groundwork laid for a possible deal in the coming months. There is a very significant psychological anchor for oil at around $45. It always seems to come back to that level. It’ll take something like an OPEC deal to really change that dynamic.”
West Texas Intermediate for November delivery was at $45.86 a barrel on the New York Mercantile Exchange, down 7 cents, at 2:03 p.m. in Hong Kong. The contract gained $1.45 to $45.93 on Monday. Total volume traded was about 24 percent below the 100-day average. Prices have averaged about $44.80 this quarter.
OPEC Meeting
Brent for November settlement was 17 cents lower at $47.18 a barrel on the London-based ICE Futures Europe exchange. The contract gained $1.46, or 3.2 percent, to $47.35 on Monday. The global benchmark crude traded at a premium of $1.33 to WTI.
Saudi Arabia has offered to reduce production to January levels, according to Algeria’s Energy Minister. That would remove about half of the kingdom’s 1 million barrel-a-day increase in output since it led OPEC’s push to defend market share in 2014. Negotiations in Algiers will be a “warm up” for OPEC’s next meeting in Vienna in November, Iran’s oil ministry news service Shana reported, citing Minister of Petroleum Bijan Namdar Zanganeh.
Oil-market news:
- Russia will discuss whether it will meet with all OPEC members, Russian Energy Minister Alexander Novak told reporters in Algiers.
- U.S. crude stockpiles probably rose by 3 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. That would be the first gain in four weeks.