Oil Prices Mixed as OPEC Meeting Looms -- Update
September 23 2016 - 7:57AM
Dow Jones News
By Mike Bird
Oil prices were mixed during morning European trading Friday,
following two days of strong gains as the market approaches next
week's meeting of major oil producers with caution.
Brent crude on London's ICE Futures exchange rose 0.29%, to
$48.35 a barrel. West Texas Intermediate, the U.S. benchmark, was
down 0.22% to $46.22.
After falling in early trading, prices rose around a Reuters
report that the Saudi Arabian government is ready to cut its own
oil output if the Iranian government freezes its production
levels.
But analysts remain skeptical over next week's meeting of the
Organization of the Petroleum Exporting Countries. The general view
is that OPEC heavyweights, such as Saudi Arabia, Iran and Iraq,
won't be able to forge a consensus to either slash or freeze
production due to their longstanding political rivalry and emphasis
to expand market share.
"Even an agreement to freeze would not be bullish either, given
how high current production levels are. The only bullish case would
be a credible and significant supply cut, which as it stands right
now is extremely unlikely," said Tamas Varga, an analyst at PVM Oil
Associates.
At 11 million barrels a day, Russian production levels are now
at their highest since the collapse of the Soviet Union, according
to Commerzbank commodities researchers. "The supply of crude oil
remains ample, in other words," the bank's analysts added in a note
Thursday.
There has been a blast of rhetoric from major OPEC producers
since the meeting was called in late August, which has lifted
prices. Saudi Arabia and Russia this month signed an
oil-cooperation agreement. OPEC oil chief Mohammed Barkindo last
weekend said that if agreed by all parties, an emergency meeting
could be called later this year to solidify a policy. Venezuelan
President Nicolás Maduro has also said OPEC and non-OPEC members
were close to a deal.
A senior OPEC official was quoted by The Wall Street Journal as
saying that OPEC has to keep the chatter going, "to make sure
prices don't fall to a certain level or rise to a certain level
they don't like, and recently we have seen a lot of that."
Nymex reformulated gasoline blendstock for October--the
benchmark gasoline contract--fell 1.1% to $1.385 a gallon.
Write to Mike Bird at Mike.Bird@wsj.com
(END) Dow Jones Newswires
September 23, 2016 07:42 ET (11:42 GMT)
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