WTI oil barter near $66 as OPEC's mixed views deepen supply dilemma
OPEC's June 22 meet in Vienna could end in failure: Bernstein.
WTI advances 0.3 percent this week, trades above $66 a barrel.
Petroleumworld 06 08 2018
Oil traded near $66 a barrel as conflicting signals from OPEC members about whether their output curbs will be relaxed spurred speculation that an agreement will prove elusive at an upcoming group meeting.
Futures were little changed in New York, after they flipped between gains and losses over the past four sessions. While Saudi Arabia and Russia have signaled they're ready to boost output, Iraqi Oil Minister Jabbar al-Luaibi told Reuters that an increase won't be on the table at the June 22 meeting in Vienna. The U.S. is said to have asked the group to raise supplies by about 1 million barrels a day, further raising the prospect of a contentious gathering.
The meeting may end in failure due to misaligned positions of member countries and the need of unanimity for any decision, according to Sanford C. Bernstein & Co. While crude is heading for its first weekly advance since mid-May, it has receded about 8 percent since late last month on speculation that OPEC and its allies would ease output curbs at a time when U.S. drillers continue pumping at a record pace.
“The views are so widely different among OPEC members that they'll probably fail to reach an agreement at the meeting later this month,” Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone in Seoul. “Prices are likely to seesaw without any clear direction as uncertainties rise in the market.”
West Texas Intermediate for July delivery nudged up 7 cents to $66.02 a barrel on the New York Mercantile Exchange at 12:20 p.m. in Singapore, and are up 0.3 percent on the week. The contract rose 1.9 percent to $65.95 on Thursday. Total volume traded was about 43 percent below the 100-day average.
Brent futures for August settlement were down 8 cents, or 0.1 percent, at $77.24 a barrel on the London-based ICE Futures Europe exchange. Prices on Thursday gained $1.96 to $77.32. The global benchmark traded at a $11.26 premium to WTI for the same month.
Futures rose 1.6 percent to 473.4 yuan a barrel at the mid-day break on the Shanghai International Energy Exchange, after edging up 0.2 percent on Thursday.
With some members of the Organization of Petroleum Exporting Countries resisting the Saudi-Russia proposal to ease output caps that have been in place since 2017, attention is also on a Moscow meeting between Russian President Vladimir Putin and Mohammed bin Salman, the powerful Saudi crown prince, at a World Cup soccer match on June 14. That's only eight days before OPEC's crucial Vienna gathering.
Saudi Arabia and Russia brokered a landmark deal in late 2016 to cut production to shrink a global glut, assembling a group of 24 nations from OPEC and outside the cartel. Putin has spoken on the phone with the Saudi king or the crown prince in the days before recent OPEC meetings to discuss what the Kremlin has called “fruitful coordination on world hydrocarbon markets.”
The request from the U.S., which is not part of the supply deal, to raise output was made after U.S. retail gasoline prices surged to their highest in more than three years and President Donald Trump publicly complained about OPEC policy and rising prices. It also follows Washington's decision to reimpose sanctions on Iran, putting the OPEC member's crude exports at risk at a time when fellow group producer Venezuela is struggling with an economic crisis.
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Heesu Lee from Bloomberg.
bloomberg.com 06 08 2018
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