Oil headed for its biggest weekly loss in almost 10 months after giving up all its gains since OPEC agreed to trim output as skepticism grows over implementing the deal and as rising U.S. inventories worsen a glut.
Futures were little changed Friday in New York after falling 10 percent the previous five sessions. Prices closed Thursday at the lowest level since OPEC reached a preliminary agreement in Algiers to cut production. U.S. inventories increased by a record last week, government data showed Wednesday, while members from the Organization of Petroleum Exporting Countries claiming exemptions from the Sept. 28 supply agreement boosted production in October.
Oil has retreated below $45 a barrel, triggered by the failure of OPEC last week to agree on output quotas for member countries, a preliminary step toward finalizing the deal. While Goldman Sachs Group Inc. sees little probability of an agreement at a Nov. 30 meeting, Bank of America Merrill Lynch and Citigroup Inc. say an accord is likely.
“Given the recent weakness in price, perhaps the market is losing faith in what they can effectively deliver,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London. “It is a long road from Algiers to Vienna, and some countries like Iraq are already taking an exit from participating in cuts. What OPEC may ultimately deliver risks falling short of what is required.”
West Texas Intermediate for December delivery was at $44.77 a barrel on the New York Mercantile Exchange, 11 cents higher, at 9:39 a.m. London time. Total volume traded was about 21 percent below the 100-day average. The contract lost 1.5 percent to $44.66 on Thursday, the lowest close since Sept. 23. Prices are down 8.2 percent this week, the most since the period ending Jan. 15.
Iraq Output
Brent for January settlement was 5 cents higher at $46.40 a barrel on the London-based ICE Futures Europe exchange. The contract declined 1.1 percent to $46.35 a barrel on Thursday. Prices are down 6.8 percent this week. The global benchmark traded at a premium of $1.04 to January WTI.
For a story on Saudi Aramco increasing oil pricing to Asia, click here.
Iraq’s Kurds say their oil production in September was 290,000 barrels a day lower than the federal government’s figures for the semi-autonomous region, as OPEC’s second-biggest member tries to resolve accounting differences with the producer group over its output. Iraq is seeking to be excluded from production cuts because it’s embroiled in a war with Islamic militants.
Oil-market news:
Oil producers in the North Sea are poised to ship in December the most crude in more than four years, according to data compiled by Bloomberg. Former Saudi Arabian Oil Minister Ali al-Naimi said in London that OPEC’s 2014 decision to let the market balance itself has been successful, and that it was a mistake for the kingdom to act as swing producer Colonial Pipeline Co. said it’s on target for a Saturday restart after crews made “substantial progress” Wednesday by removing product from a portion of the pipeline’s 1.3 million-barrel-a-day main gasoline line. U.S. crude stockpiles rose by 14.4 million barrels last week as imports surged the most in almost 20 years, according to an Energy Information Administration report Wednesday.
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