Oil slipped from the highest close in more than two years after U.S. drillers expanded operations while OPEC and Russia prepare to discuss longer supply curbs.
Futures slid as much as 2.4 percent in New York after rising 1.6 percent Friday to the highest since June 2015. OPEC and Russia, partners in the oil-cuts deal, have crafted the outline of an agreement to extend curbs to the end of next year, according to people involved in the discussions. In the U.S., drillers targeting crude added nine rigs last week, Baker Hughes data show.
Oil has advanced about 23 percent since the start of September on speculation the Organization of Petroleum Exporting Countries and its allies will prolong output reductions to drain a global glut. Russia had been hesitating over agreeing to extend cuts at the Nov. 30 OPEC meeting in Vienna because the current deal doesn’t expire until the end of March.
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“What we’re seeing is cold feet heading into the OPEC meeting,” said Ashley Petersen, lead oil market analyst at Stratas Advisors in New York. “After exuberance over three weeks now, investors are getting nervous. That’s going to be the dominant driver regardless of the weekly fundamental data.”
West Texas Intermediate for January delivery fell $1.27 to $57.68 a barrel on the New York Mercantile Exchange at 10:37 a.m. New York time. Prices gained 93 cents to $58.95 on Friday, capping a 4.2 percent weekly advance.
Read our OPEC Reality Check to see what’s at stake for each producer
Brent for January settlement fell by as much as 76 cents to $63.10 a barrel on the London-based ICE Futures Europe exchange, after rising 1.8 percent last week. The global benchmark crude traded at a premium of $5.66 to WTI.
OPEC and Russia are still hammering out crucial details for an extension, the people involved in the conversations said last week. Russia wants the deal to include new language that would link the size of the curbs to the health of the oil market, they said.
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