Oil held near $55 a barrel as traders who were once certain OPEC and Russia would extend their output cuts beyond March aren’t so sure anymore.
Futures were little changed in New York after falling 2.5 percent the previous two sessions. According to report by Bloomberg, OPEC hasn’t yet convinced Russia that it’s necessary to reach an agreement to extend oil-output cuts at a meeting in Vienna this month, people with knowledge of the matter said this week. U.S. crude inventories expanded for a second week while output climbed for a fourth time to 9.65 million barrels a day, the highest in more than three decades, according to the Energy Information Administration.
Oil has eased after reaching a two-year high last week on signs of tightening supplies and near certainty, the Organization of Petroleum Exporting Countries and its allies would prolong output curbs. Yet, it has emerged this week that the outcome of the Nov. 30 meeting is far from certain.
“There’s now just a 50-50 chance of an announcement coming after this meeting, and I wouldn’t have said that even a week ago,” said Michael Poulsen, an analyst at Global Risk Management Ltd. “It is suddenly a very mixed picture.”
West Texas Intermediate for December delivery was at $55.29 a barrel on the New York Mercantile Exchange, down 4 cents as of 9:42 a.m. in London. Total volume traded was about 29 percent below the 100-day average. Prices fell 37 cents to $55.33 on Wednesday.
Brent for January settlement fell 10 cents to $61.77 a barrel on the London-based ICE Futures Europe exchange. Prices declined 34 cents to $61.87 on Wednesday. The global benchmark was at a premium of $6.28 to January WTI.
Executives of Russian companies in a meeting with Energy Minister Alexander Novak on Wednesday had differing opinions about whether an extension is necessary or how long it could last, said a government official familiar with the matter, asking not to be named because they’re not authorized to speak to the press. Discussions will resume next week.
U.S. crude stockpiles rose by 1.85 million barrels last week, according to the EIA report. The median estimate in a Bloomberg survey had forecast a 2.4 million barrel decline. Inventories at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, fell 1.5 million barrels.