Tokyo - Oil slipped a fourth day, heading for the longest run of declines since April, as OPEC ministers gather in Vienna ahead of a meeting on Thursday to discuss production policy.
Futures fell as much as 1 percent in New York, after declining 0.9 percent the previous three sessions. Canadian oil-sand producers, including Suncor Energy, began resuming operations after wildfire threats eased, while supply disruptions continued to reduce output in Nigerian and Libya.
The global oversupply that caused prices to slump since 2014 is correcting itself, the United Arab Emirates oil minister said in Vienna on Tuesday.
Oil has surged about 85 percent since touching a 12-year low in February on signs the global surplus is easing amid declining output. The Organisation of Petroleum Exporting Countries is unlikely to reach an agreement limiting production this week as the group sticks with Saudi Arabia’s strategy of squeezing out rivals, according to analysts surveyed by Bloomberg.
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“There is very low expectations for anything constructive to come out of this meeting,” Angus Nicholson, a markets analyst in Melbourne at IG, said by phone. “The base-case scenario will be a continuation of Saudi Arabia’s recent announcement where they refuse to commit to any sort of supply freeze if Iran is not party to it.”
West Texas Intermediate for July delivery fell as much 49 cents to $48.61 a barrel on the New York Mercantile Exchange and was at $48.66 at 1.58pm Hong Kong time. The contract dropped 23 cents to close at $49.10 on Tuesday. Total volume traded was 18 percent below the 100-day average.
Renewed optimism
Brent for August settlement fell as much as 1.1 percent to $49.36 a barrel on the London-based ICE Futures Europe exchange. The July contract expired on Tuesday after slipping 7 cents to $49.69 a barrel. The global benchmark crude traded at a 30-cent premium to WTI for August.
UAE Oil Minister Suhail Al Mazrouei’s comments - the first by an OPEC minister this week ahead of their meeting on Thursday - suggest renewed optimism among producers. He also said on Twitter OPEC’s policy of giving the market time to balance itself has proven to work but it still needs some time.
BLOOMBERG