Hong Kong - Oil declined amid doubts producers will agree on a deal to stabilise the market when suppliers meet next month for informal talks.
Futures decreased as much as 1.8 percent in New York after rising the previous two sessions. The oil market should achieve stability soon, United Arab Emirates Oil Minister Suhail Al Mazrouei said in a Twitter post. Iran’s plan to continue boosting crude output until it regains its pre-sanctions OPEC market share is dimming prospects of collective action, according to Patrick Allman-Ward, chief executive officer of Dana Gas PJSC.
Oil entered a bull market on August 18, less than three weeks after tumbling into a bear market, as prices surged partly on speculation that discussions among members of the Organisation of Petroleum Exporting Countries may lead to action to stabilise the market. A deal to freeze output was proposed in February, but a meeting in April ended with no final accord.
“The likelihood of them actually agreeing to some kind of production freeze is relatively low,” Daniel Hynes, a senior commodity strategist at Australia & New Zealand Banking Group in Sydney, said in a Bloomberg television interview. “It’s certainly been so far a successful jawboning exercise.”
West Texas Intermediate for October delivery dropped as much as 86 cents to $46.78 a barrel on the New York Mercantile Exchange and was at $46.94 at 11.29am in Dubai. The contract gained 31 cents to $47.64 on Friday, trimming a weekly decline. Total volume traded was about 37 percent below the 100-day average. Prices slid 1.8 percent last week.
Brent for October settlement lost as much as 80 cents, or 1.6 percent, to $49.12 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.31 to WTI.
Any decision to stabilise the market will require the full participation of all OPEC members and major suppliers from outside the group, Al Mazrouei said. The UAE is the fourth biggest OPEC producer, pumping 2.93 million barrels a day in July. Saudi Arabian output was 10.43 million a day the same month.
* With assistance from Tsuyoshi Inajima and Ramy Inocencio
BLOOMBERG