Oil prices drop as Iraq says doesn’t want to join OPEC cut

Tuesday, 25 October 2016 00:01 - - {{hitsCtrl.values.hits}}

Singapore (Reuters): Oil prices fell early on Monday as Iraq said it wanted to be exempt from any deal by producer cartel OPEC to cut production to prop up the market, and as U.S. drillers stepped up work.

Brent crude futures LCOc1 were trading at $51.59 per barrel at 0133 GMT, down 19 cents, or 0.4%, from their last close.

U.S. West Texas Intermediate (WTI) crude was down 22 cents, or 0.4%, at $50.63 a barrel.

Traders said the price falls followed comments from Iraq, which said it wanted to be exempt from a production cut by the Organization of the Petroleum Exporting Countries (OPEC) that the group plans to decide at its Nov. 30 meeting.

OPEC plans to reduce production to a range of 32.50 million to 33.0 million barrels per day (bpd), down from 33.39 million bpd in September.

Flames emerge from a pipeline at the oil fields in Basra, southeast of Baghdad, Iraq 14 October

That would be harder to achieve if Iraq, which is OPEC’s second-biggest producer after Saudi Arabia, didn’t participate.

Iraq said on Sunday that its oil production stood at 4.774 million bpd, with exports standing at 3.87 million bpd. “We are not going back in any way, not by OPEC not by anybody else,” said Falah al-Amri, the head of Iraq’s State Oil Marketing Company.

“Comments by Iraq over the weekend that it may not join the OPEC agreement to cut production could see oil prices come under pressure in today’s session,” ANZ bank said on Monday.

Also pressuring the market, U.S. oil rigs rose by 11 last week, the first double-digit increase since August.