Oil prices dip ahead of OPEC meeting

OPEC and its allies are one step closer on agreeing to an oil production cut, despite requests from US President Donald Trump to reduce crude prices.

Oil
Source: Bloomberg

Ahead of OPEC’s meeting on Thursday in Vienna, the production group’s major leader, Saudi Arabia has hinted a need for steep reductions from January.

Oman’s Oil Minister Mohammed bin Hamad Al-Rumhy told reporters on Wednesday "All of us including Russia agreed there is a need for a reduction,"

This comes after Russia had reportedly resisted a large cut, insisting the cuts should only be half of the 250,000 bpd suggested.

Saudi Arabia is asking OPEC and its allies to cut output by 1.3 million barrels per day, making up 1.3% of global production. .

Oil Prices Fall

Oil prices fell on Thursday as traders were cautious ahead of the OPEC meeting. Crude lost nearly 30% of its value amid surging supplies.

OEPC is expected to decide on a cut aimed at draining a glut that analysts say has pulled down the price of crude, significantly over the past few months.

US West Texas Intermediate (WT) crude futures were at $52.57 per barrel at time of writing, down 32 cents from last close.

International Brent crude oil futures were down 17 cents, or 0.3% at $61.39 per barrel. Gasoline rose 0.2% to $1.4456 a gallon in New York trading, while US oil is expected to retest a support at $51.75 per barrel.

Brent oil is set to fall into range of $59.31-$60.33 per barrel

Iran and OPEC

Iran has requested to be exempt from OPEC oil output cuts due to US already putting sanctions on its oil exports.

“We should be excluded from any decision about the level of production in the future till the lifting of the imposed illegal sanctions,” Iranian Oil Minister Bijan Zanganeh told reporters on Thursday

US oil is expected to retest a support at $51.75 per barrel, while Brent oil is set to fall into a range of $59.31-$60.33 per barrel.

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