Oil falls below $99

Thursday, 18 September 2014 00:00 - - {{hitsCtrl.values.hits}}

Reuters : Brent crude oil fell below $99 per barrel on Wednesday after a bigger-than-expected build in weekly U.S. crude stocks, and a strong dollar continued to create headwinds for commodities. U.S. crude stocks rose more than twice as much as expected week-on-week, the Energy Information Administration said, as refineries cut output and imports jumped. Crude inventories were up 3.7 million barrels, compared with analysts’ expectations for a decrease of 1.6 million barrels. Brent was down 42 cents at $98.63 a barrel by 1457 GMT, after closing up $2.40 in the previous session, the biggest daily gain since Sept. 3. U.S. crude was down 86 cents at $94.02 after rising 2.1 percent on Tuesday. The U.S. crude stock builds were big enough to reverse Brent’s rally on Tuesday, when prices had risen by the most in two-and-a-half months. Brent had been boosted by a statement from Abdullah al-Badri, the Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), saying that the group could trim its 2015 output target by 500,000 barrels per day (bpd). On Wednesday, others in OPEC were cautious. The group may not need to cut its oil output target at a meeting in November, a Gulf OPEC delegate and other OPEC sources said, as strengthening demand in coming winter months should support oil prices. The market hoped this might help reduce a global supply glut, which has weighed on physical crude prices in northwest Europe and prompted traders to put large volumes of crude into storage. Many OPEC countries need oil prices above $100 a barrel in order to meet their budget needs and analysts say Saudi Arabia, OPEC’s biggest producer, could cut production in an effort to support prices. Any production cut by OPEC, due to meet in November, would be the group’s first since 2008.

No guarantee of OPEC output target cut in November

DUBAI/LONDON (Reuters): OPEC may not need to cut its oil output target at a meeting in November, a Gulf OPEC delegate and other OPEC sources said on Wednesday, as strengthening demand in coming winter months should support oil prices that have fallen below $100 a barrel. Oil ministers from the Organisation of the Petroleum Exporting Countries are scheduled to meet in Vienna on Nov. 27, to consider whether to adjust their output target of 30 million barrels per day (bpd) for early 2015. On Tuesday, OPEC Secretary General Abdullah al-Badri said he expected the group’s production to be around 29.50 million bpd in 2015, not 30 million bpd. “I think our target will be lower, maybe by 500,000,” he said. But OPEC delegates said on Wednesday it was too early to predict a cut in the output target, while Algeria’s oil minister said he believed current prices were not a matter for concern. “It is still early to judge,” a OPEC delegate from a Gulf country said. A second delegate said: “All believe oil prices will recover, so no need for action.”