Futures retreated 0.7 percent after settling on Tuesday at the highest level since Nov. 1. Saudi Arabian Energy Minister Khalid Al-Falih will join fellow members of the Organization of Petroleum Exporting Countries in Doha this week for informal consultations with Russia. U.S. crude stockpiles expanded by 3.65 million barrels last week, the industry-funded American Petroleum Institute was said to report Tuesday. Government data Wednesday is forecast to show supplies rose by 1 million barrels, according to Bloomberg.
Oil retreated for the past three weeks amid skepticism about the ability of OPEC to implement a deal at its Nov. 30 meeting. The group is seeking to trim output for the first time in eight years as Iran boosts production and Iraq seeks an exemption because of war with Islamic militants. Prices will probably remain around current levels if OPEC fails to cut, according to BP Plc Chief Executive Officer Bob Dudley.
“We estimate the possibility of an actual OPEC production cut as 50-50,” said Hans Van Cleef, energy economist at ABN Amro Bank NV. “Although reaching a successful deal is not impossible, higher production levels do not facilitate the upcoming negotiations.”
West Texas Intermediate for December delivery was at $45.51 a barrel on the New York Mercantile Exchange, down 30 cents, at 9:48 a.m. in London. The contract gained $2.49 to $45.81 on Tuesday, the biggest advance since April 8.
OPEC Diplomacy
Brent for January settlement was 16 cents lower at $46.79 a barrel on the London-based ICE Futures Europe exchange. The contract climbed $2.52, or 5.7 percent, to $46.95 on Tuesday. The global benchmark traded at a premium of 64 cents to January WTI.
OPEC Secretary-General Mohammed Barkindo will tour member states after he met with Saudi Arabia’s Al-Falih in London, according to a person familiar with the talks. Barkindo will travel to Caracas, Quito in Ecuador and Tehran for talks in coming days, said two people familiar with the matter, who asked not to be identified because the information isn’t public.
Russia will meet with some members at a forum in Doha on Nov. 17-18, the Energy Ministry in Moscow said in a statement Tuesday. Saudi Arabia will join the talks, said an OPEC delegate.
Oil-market news:
- U.S. oil production will grow more than previously thought this decade as shale drillers adapt to low prices, while suppliers elsewhere are hit harder by OPEC’s fight for market share, the International Energy Agency said.
- U.S. gasoline exports have climbed above imports for three consecutive weeks as recurring pipeline outages and higher production levels by refiners caused Gulf Coast inventories to grow.
- OPEC member Libya plans to almost double crude production next year even as the group tries to implement a deal to trim output.