Brent crude price down, WTI up as OPEC output cut dims

Brent crude price down, WTI up as OPEC output cut dims

Tuesday, November 25, 2014 8:48 am

Oil prices were mixed in Asia Tuesday as dealers bet that the OPEC cartel is unlikely to agree on any cuts at a key output meeting this week, analysts said.

US benchmark West Texas Intermediate for January delivery rose nine cents at $75.87 while Brent crude for January fell eight cents to $79.60 in afternoon trade.

Oil investors are “speculating that OPEC will not be able to agree to any cut or even commitment to rein in excess oil production”, Singapore’s United Overseas Bank said in a commentary.

The 12-nation Organization of the Petroleum Exporting Countries will hold one of its toughest and most significant meetings in recent years on Thursday, with members under pressure to address falling prices, which have sunk 30 percent since June.

OPEC’s poorer members, led by Venezuela and Ecuador, have called publicly for a cut in output, while Iran has also hinted at the need for a reduction.

But the cartel’s Gulf members, led by kingpin Saudi Arabia, are rejecting such calls unless they are guaranteed market share in the highly competitive arena, according to analysts.

Saudi Oil Minister Ali al-Naimi was silent about his government’s intentions Monday as he arrived in Vienna ahead of the OPEC gathering.

“Is this the first time we have oversupply?” he was quoted as saying by Dow Jones Newswires when questioned about current supply and demand.

However his Iraqi counterpart Adel Abdel Mahdi arrived in Vienna pushing for action, deeming the steep price drop “not acceptable”.

Dealers are also eyeing third-quarter gross domestic product (GDP) data from the United States to gauge demand in the world’s top crude consumer, UOB said.

The Singapore lender said the data is likely to show the US economy grew at an annual rate of 3.8 percent in the July-September quarter, up from a previous estimate of 3.5 percent.

Daniel Ang, investment analyst at Phillip Futures in Singapore, said positive US growth data will “give some support to crude prices, allowing them to inch up a little”.

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