US oil is set for the first weekly drop since mid-September as an OPEC committee meets in Vienna on Friday to discuss output quotas for members participating in an agreement to cut production.
Futures slid as much as 0.9 percent in New York and are down 3.1 percent for the week. Brazil will attend the Organization of Petroleum Exporting Countries gathering Saturday, joining other producers from outside the group, including Russia, as the bloc that controls about 40 percent of world production seeks non-member cooperation on reducing output. Saudi Arabia and its Gulf allies are willing to cut 4 percent from their peak production, Reuters reported, citing people familiar with the matter.
Oil has fluctuated near $50 a barrel amid uncertainty about whether OPEC can implement the first supply cuts in eight years at its official November meeting. The OPEC committee will try to resolve differences over how much individual members should produce, with Iraq saying Sunday it should be exempt because of conflict with Islamic militants. The group’s Secretary General Mohammed Barkindo this week called for “ maximum flexibility” from members to stabilize the market.
“It’s all eyes on Vienna,” said Giovanni Staunovo, a Zurich-based commodities analyst at UBS Group AG. “Key signs will be how they aim to solve the current hurdles, what data be used, who gets exemptions, who needs to cut how much, and how compliance is assured.”
West Texas Intermediate for December delivery was at $49.28 a barrel on the New York Mercantile Exchange, down 44 cents, at 12:48 p.m. in London. The contract gained 54 cents to $49.72 a barrel on Thursday. Total volume traded was about 26 percent below the 100-day average. Prices are set for the first weekly drop in six weeks.
Brent for December settlement was 31 cents lower at $50.16 a barrel on the London-based ICE Futures Europe exchange. Futures rose 49 cents, or 1 percent, to $50.47 a barrel on Thursday. Prices are down 2.8 percent this week. The global benchmark crude traded at a premium of 88 cents to WTI.
For a story on an OPEC deal barely trimming the oil surplus, click here.
Brazil’s Oil and Gas Secretary Marcio Felix will leave Friday for Vienna, the country’s Energy Minister Fernando Bezerra Coelho Filho said by text message Thursday. The Latin American nation will boost output by 290,000 barrels a day next year to 2.9 million a day, the biggest increase of any non-OPEC country, according to the International Energy Agency.
Business was still looking pretty bleak for major oil companies halfway through their third-quarter earnings season. Of the four producers to report so far — Statoil ASA, Eni SpA, Total SA and ConocoPhillips — three posted a net loss and two of those did much worse than analysts were expecting. Exxon Mobil Corp. and Chevron Corp. also report Friday.
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