- Title: Oil prices fall over doubts of planned crude output cut
- Date: 28th November 2016
- Summary: LONDON, ENGLAND, UK (NOVEMBER 28, 2016) (REUTERS) (SOUNDBITE) (English) MIKE INGRAM, MARKET STRATEGIST, BGC PARTNERS, SAYING: "If you look back to the tentative agreement brokered in Algiers at the end of September, it was to cut OPEC production to between thirty two and a half and thirty three million barrels a day. That implies between a one and one million and a half barrel cut from the record levels in October. The problem is trying to work out who is actually going to implement this. We've got this very very long list of OPEC producers who say they don't want to cut. In fact many such as Libya and Nigeria are seeking to actually increase production from where it is currently. So the issue is as ever, implementation and Saudi you know within the last 24 hours clearly balking at being pushed back into its historic role as the swing producer within OPEC. Russia not really wanting to come on board - no surprise there for me at all. So as I say, its finding words and now they have to put up or shut up, it looks as though they are going to have to shut up."
- Embargoed: 13th December 2016 11:12
- Keywords: oil OPEC Saudi Arabia output deal markets global supply Iran Iraq
- Location: LONDON, ENGLAND, UK/UNKNOWN LOCATION, SAUDI ARABIA/GULF OF MEXICO/SHAYBAH, SAUDI ARABIA/SAMARA REGION, RUSSIA/NORTH SEA/
- City: LONDON, ENGLAND, UK/UNKNOWN LOCATION, SAUDI ARABIA/GULF OF MEXICO/SHAYBAH, SAUDI ARABIA/SAMARA REGION, RUSSIA/NORTH SEA/
- Country: Saudi Arabia
- Reuters ID: LVA0025ACYSGD
- Aspect Ratio: 16:9
- Story Text: Oil prices fell on Monday (November 28), adding to Friday's steep losses as doubts re-emerged over the ability of major producers to agree output cuts at a planned meeting on Wednesday aimed at reining in global oversupply.
The dollar and U.S. bond yields fell as investors reversed a "Trumpflation" trade that has gripped markets since the U.S. elections, after oil prices slid.
Brent crude futures fell 2 percent at one point, but regained ground to trade down 35 cents, or 0.74 percent, at $46.89 per barrel.
U.S. West Texas Intermediate crude futures also retraced early loses and was trading down 38 cents, or 0.78 percent, at $45.70 a barrel.
Monday's fall came amid choppy trading and after prices tumbled more than 3 percent on Friday on disagreement between OPEC and non-OPEC crude exporters like Russia over who should cut production by how much in order to curb a global supply overhang that has more than halved prices since 2014.
"The problem is trying to work out who is actually going to implement this. We've got this very very long list of OPEC producers who say they don't want to cut. In fact many such as Libya and Nigeria are seeking to actually increase production from where it is currently. So the issue is as ever, implementation", said BGC Partners' Mike Ingram.
Despite the wrangling, some traders said they still expected some form of an output restriction to be agreed this week.
The Organization of the Petroleum Exporting Countries (OPEC) will meet in Vienna on Wednesday to decide on the details of a cut, potentially including non-OPEC members like Russia. A meeting between OPEC and non-OPEC producers that was to be held on Monday was called off after Saudi Arabia declined to attend.
Saudi Arabia's energy minister Khalid al-Falih said on Sunday that Saudi representatives would not attend the talks originally scheduled for Monday because no agreement within OPEC had been reached so far.
Falih said that the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.
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