Crude extended its decline after U.S. stockpiles rose and as OPEC meets Russia for informal talks without oil ministers from Iran and Iraq, the two countries that pose the biggest hurdle to an output deal.
Futures lost as much as 0.6 percent in New York after dropping 0.5 percent Wednesday. U.S. crude stockpiles climbed for a third week, the longest run of gains since August, according to a government report. Russia will hold discussions with representatives from the Organization of Petroleum Exporting Countries in Doha from Thursday, Energy Minister Alexander Novak said. There’s a high chance of an agreement and Russia is ready to support a decision, he said.
Crude has retreated since reaching a 2016 high last month near $52 a barrel amid skepticism about the ability of OPEC to implement a deal at its Nov. 30 meeting in Vienna. The group is seeking to trim output for the first time in eight years, a plan complicated by Iran’s commitment to boost production and Iraq’s request for an exemption to help fund its war with Islamic militants. OPEC will likely complete an accord that doesn’t include individual supply targets for members, according to a Bloomberg survey.
“The market is focused on OPEC,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney. “The build in U.S. crude stockpiles applies more pressure on the group to finalize an agreement. No action by OPEC will see oil prices slide to $35 a barrel.”
West Texas Intermediate for December delivery was at $45.34 a barrel on the New York Mercantile Exchange, down 23 cents, at 3:09 p.m. in Hong Kong. The contract lost 24 cents to $45.57 on Wednesday. Total volume traded was about 26 percent below the 100-day average.
Doha Talks
Brent for January settlement was 25 cents lower at $46.38 a barrel on the London-based ICE Futures Europe exchange. The contract fell 32 cents to $46.63 on Wednesday. The global benchmark traded at a premium of 52 cents to January WTI.
See also: Russian engagement with OPEC said to yield $6 billion budget gain
Hamed Al-Zobaie, Iraq’s deputy minister for natural gas affairs, will represent the country in Doha, according to a spokesman from the oil ministry. Iran will be represented by OPEC Governor Hossein Kazempour Ardebili and the country’s national representative at OPEC, Behrooz Baikalizadeh, an official said. Delegates are gathering for the Gas Exporting Countries Forum on Nov. 17-18.
OPEC Secretary-General Mohammed Barkindo recently met with Saudi Minister of Energy and Industry Khalid Al-Falih in London, according to an OPEC delegate. Barkindo will travel to Caracas, Quito and Tehran for talks in the coming days, said two people familiar with the matter, who asked not to be identified because the information isn’t public.
Oil-market news:
U.S. crude stockpiles increased by 5.27 million barrels to 490.3 million barrels last week, according to a report Wednesday from the Energy Information Administration. OPEC will finalize a deal to cut output at its meeting this month, according to 14 of 20 analysts polled this week by Bloomberg.
–With assistance from Perry Williams. To contact the reporter on this story: Ben Sharples in Hong Kong at
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