Brent oil holds below $50 as Russia oppose deeper OPEC cuts
Russia to oppose any proposal to cut output further: officials. U.S. crude stockpiles forecast to resume declines: survey
Petroleumworld 07 05 2017
Brent crude traded below $50 a barrel after ending the longest run of gains since 2012 as Russia was said to oppose any proposal to deepen OPEC-led production cuts.
Futures were little changed in London after losing 7 cents on Tuesday, snapping an 11 percent increase over eight sessions. Russia wants to continue with the current deal and any further supply curbs would send the wrong message to the market, according to government officials. U.S. crude stockpiles probably resumed declines last week, a Bloomberg survey showed before an Energy Information Administration report Thursday.
Sources: Bloomberg, OPEC secondary-source estimates, IEA preliminary estimates. Includes revised data
While prices have surged during the past week, oil remains in a bear market after concerns that rising global supply will offset output cuts from the Organization of Petroleum Exporting Countries and its partners. Libya and Nigeria , exempt from the OPEC-led curbs, accounted for half of the group's production boost last month, according to data compiled by Bloomberg.
“The environment at the moment isn't conducive for prices to extend the rally,” said Daniel Hynes, a Sydney-based analyst at Australia & New Zealand Banking Group Ltd. “Supply dynamics are against the market. It'll probably be a bit of a wait-and-see period to evaluate the impact of sub-$50 oil.”
Brent for September settlement was at $49.62 a barrel on the London-based ICE Futures Europe exchange, up 1 cent, at 7:45 a.m. in London. The contract fell 0.1 percent to $49.61 on Tuesday, the first decline in nine sessions. Prices dropped 9.3 percent in the previous quarter.
West Texas Intermediate for August delivery was down 2 cents to $47.05 a barrel on the New York Mercantile Exchange. Transactions on Tuesday will be booked Wednesday for settlement purposes because of the U.S. Independence Day holiday. Prices gained almost 11 percent in the eight days through Monday.
Deepening cuts would suggest that OPEC, Russia and their allies are nervous that the pact to reduce output by a combined 1.8 million barrels a day through March 2018 isn't doing enough to support prices, an official said.
07 05 2017
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