Oil Markets in 'Wait-and-See' Mode Ahead of OPEC Meeting
November 20 2017 - 5:47AM
Dow Jones News
By Sarah McFarlane
Oil prices were steady Monday ahead of next week's meeting of
global crude producers where an extension of output cuts is set to
be discussed.
Brent crude, the global oil benchmark, fell 0.5% to $62.44 a
barrel on London's ICE Futures exchange. On the New York Mercantile
Exchange, West Texas Intermediate futures were trading up 0.1% at
$56.72 a barrel.
The Organization of the Petroleum Exporting Countries and other
producers including Russia will meet on Nov. 30 and review whether
to extend the production cuts due to expire in March 2018. The deal
aims to reduce a glut of global stocks to their five-year
average.
"We're expecting a potential extension of the deal, that's the
general market consensus, OPEC knows that it needs to continue
doing what it's doing because its targets haven't been reached,"
said Mustafa Ansari, energy economist at development bank Arab
Petroleum Investments Corp.
Oil prices have rallied in recent months to break above $60 for
the first time in more than two years, aided by increased
geopolitical tensions in major oil-producing nations including
Saudi Arabia, along with expectations of an extension to the cuts.
Prices ended the week lower Friday for the first time in six
weeks.
"Markets are in a wait-and-see mode ahead of the OPEC meeting
later this month," said consultancy Global Risk Management in a
note.
Analysts warned that U.S. shale production was likely to respond
quickly to the higher prices.
"Even if they [OPEC] do extend the deal, I don't see too
significant a price rise because the market understands even more
than ever before that shale production can respond immediately,"
Mr. Ansari said.
Baker Hughes reported on Friday that the number of U.S. rigs
drilling for oil was unchanged at 738, having risen by nine the
previous week.
Nymex reformulated gasoline blendstock--the benchmark gasoline
contract--fell 0.5% to $1.74 a gallon. ICE gasoil changed hands at
$561.25 a metric ton, down $1.50 from the previous settlement.
Write to Sarah McFarlane at sarah.mcfarlane@wsj.com
(END) Dow Jones Newswires
November 20, 2017 05:32 ET (10:32 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.