Hong Kong: Oil extended its decline below $50 (Dh183.50) a barrel after US industry data showed stockpiles grew and as differences emerge within Opec over how members will share output cuts.
Futures slid as much as 1.1 per cent in New York after losing 2.3 per cent the previous two sessions. US crude inventories increased by 2.7 million barrels last week, the American Petroleum Institute was said to report. While Opec has pledged to trim production, disputes have emerged over individual targets with the group’s latest output estimates showing a half-million-barrel discrepancy over how much two key members are pumping. Chinese crude imports rose to a record 8.08 million barrels a day in September.
Oil has fluctuated near $50 a barrel amid speculation about the ability of the Organisation of Petroleum Exporting Countries to implement the cuts. Russia is ready to participate with the group in a “technical exchange” to set a road map for production levels later this month in Vienna, where an Opec committee will try to resolve disputes over how much Venezuela and Iraq should pump.
“The market is waiting to see the mechanics of the Opec agreement, exactly how it’s going to work and which countries are going to cut production,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “Prices have probably advanced far enough given the possibility of increased US output. A pullback into the mid-to-high $40s is possible.”
West Texas Intermediate for November delivery fell as much as 56 cents to $49.62 a barrel on the New York Mercantile Exchange and was at $49.80 at 7:39am in London. The contract slid 61 cents to $50.18 on Wednesday. Total volume traded was 23 per cent below the 100-day average.
Brent for December settlement lost as much as 48 cents, or 0.9 per cent, to $51.33 a barrel on the London-based ICE Futures Europe exchange. The contract dropped 60 cents to $51.81 on Wednesday. The global benchmark traded at a $1.26 premium to December WTI.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, dropped by 1.35 million barrels last week, the API said Wednesday, according to people familiar with the data. An Energy Information Administration report Thursday is forecast to show nationwide inventories rose by 2 million barrels, according to a Bloomberg survey.