Oil prices ease ahead of crunch OPEC meeting on global supply glut
September 24, 2016, 12:22 am TWN
LONDON -- Oil prices eased on profit-taking Friday following two days of solid gains as traders turned their attention to next week's planned meeting of key producers.
Russia and members of the OPEC oil cartel led by Saudi Arabia will gather in Algeria for three days from Monday and are expected to discuss a stubborn supply glut that has depressed prices since 2014.
Traders are uncertain that a deal can be reached on maintaining current output levels or cutting, but reports that Saudi Arabia, Iran and Qatar met at the OPEC headquarters in Vienna have fueled optimism.
An earlier Saudi-led attempt to freeze output fell apart in April after Iran refused to participate, saying it needed to raise production depleted by years of western economic sanctions lifted only in January.
Around 1000 GMT, U.S. benchmark West Texas Intermediate (WTI) for delivery in November was down 77 cents at US$45.55 a barrel.
Brent North Sea crude for November delivery dropped 56 cents to US$47.09 a barrel compared with Thursday's close.
Both contracts booked solid gains over the previous two days — WTI surged 6.6 percent and Brent gained 3.9 percent — on data showing U.S. commercial inventories fell more than six million barrels last week, indicating strong demand in the world's top oil consuming country.
"Anticipation of next week's Algiers OPEC meeting has once again underpinned (oil prices) although the probability of an agreement is very low," said Stephen Innes, senior trader at Oanda.
"But with the recent inventory data still fresh in traders' memories, position squaring dominates the current landscape."
Oil prices plunged from peaks of more than US$100 a barrel in mid-2014 to near 13-year lows below US$30 in February as supply outpaced demand.