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.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IG Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by writer