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Oil down on strong dollar, OPEC uncertainty

Reuters  |  LONDON 

By Libby George

(Reuters) - prices slid on Friday, dragged by a strong dollar and uncertainty over whether OPEC will agree to cut production at the group's meeting next week, but benchmark contracts were on track to close the week with gains close to 4 percent.

Brent crude futures were trading at $48.53 a barrel at 1253 GMT, down 47 cents.

U.S. crude futures fetched $47.56 a barrel, down 40 cents. Overall activity on both contracts was thin after the U.S. Thanksgiving holiday and ahead of the weekend.

The main drag on prices was the dollar, which this week hit levels last seen in 2003 against a basket of other currencies. A strong dollar could crimp fuel demand due to higher costs for holders of other currencies.

Reports that state giant Saudi Aramco would in January increase supplies to some Asian customers also cast a shadow on markets, traders said.

A decline in China's October crude imports to their lowest on a daily basis since January added to the bearish tone.

But analysts said fundamentals were little changed - apart from concerns over the fate next week of a Saudi-led plan for the Organization of the Petroleum Exporting Countries and other producers to agree on cuts in crude output.

The market "is taking it easy ahead of a long weekend (in the United States) and uncertainty over OPEC," said Bjarne Schieldrop, chief commodities analyst with SEB Bank in Oslo. "There is no other big bearish news."

Schieldrop said prices could rebound if the Nov. 30 meeting succeeded in reaching a targeted production cap of 32.5 million to 33.0 million barrels per day (bpd), from the 33.64 million bpd the group pumped in October.

On Thursday, the minister of non-OPEC nation Azerbaijan said OPEC was also pushing producers outside the group to make big cuts in output.

Most analysts expect some form of cut, but it is uncertain whether that would be enough to prop up a market dogged by oversupply since 2014.

"market reaction will hinge on the credibility of the proposed action," U.S. investment bank Jefferies said, adding recent output increases to record levels in many countries now required a deep cut to lift prices significantly.

"The surge in OPEC output since August has shifted the market back into oversupply and re-balancing will be deferred until the second half of 2017 without a cut of at least 700,000 barrels per day."

(Additional reporting by Henning Gloystein in Singapore; Editing by Dale Hudson and Mark Potter)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Oil down on strong dollar, OPEC uncertainty

LONDON (Reuters) - Oil prices slid on Friday, dragged by a strong dollar and uncertainty over whether OPEC will agree to cut production at the group's meeting next week, but benchmark contracts were on track to close the week with gains close to 4 percent.

By Libby George

(Reuters) - prices slid on Friday, dragged by a strong dollar and uncertainty over whether OPEC will agree to cut production at the group's meeting next week, but benchmark contracts were on track to close the week with gains close to 4 percent.

Brent crude futures were trading at $48.53 a barrel at 1253 GMT, down 47 cents.

U.S. crude futures fetched $47.56 a barrel, down 40 cents. Overall activity on both contracts was thin after the U.S. Thanksgiving holiday and ahead of the weekend.

The main drag on prices was the dollar, which this week hit levels last seen in 2003 against a basket of other currencies. A strong dollar could crimp fuel demand due to higher costs for holders of other currencies.

Reports that state giant Saudi Aramco would in January increase supplies to some Asian customers also cast a shadow on markets, traders said.

A decline in China's October crude imports to their lowest on a daily basis since January added to the bearish tone.

But analysts said fundamentals were little changed - apart from concerns over the fate next week of a Saudi-led plan for the Organization of the Petroleum Exporting Countries and other producers to agree on cuts in crude output.

The market "is taking it easy ahead of a long weekend (in the United States) and uncertainty over OPEC," said Bjarne Schieldrop, chief commodities analyst with SEB Bank in Oslo. "There is no other big bearish news."

Schieldrop said prices could rebound if the Nov. 30 meeting succeeded in reaching a targeted production cap of 32.5 million to 33.0 million barrels per day (bpd), from the 33.64 million bpd the group pumped in October.

On Thursday, the minister of non-OPEC nation Azerbaijan said OPEC was also pushing producers outside the group to make big cuts in output.

Most analysts expect some form of cut, but it is uncertain whether that would be enough to prop up a market dogged by oversupply since 2014.

"market reaction will hinge on the credibility of the proposed action," U.S. investment bank Jefferies said, adding recent output increases to record levels in many countries now required a deep cut to lift prices significantly.

"The surge in OPEC output since August has shifted the market back into oversupply and re-balancing will be deferred until the second half of 2017 without a cut of at least 700,000 barrels per day."

(Additional reporting by Henning Gloystein in Singapore; Editing by Dale Hudson and Mark Potter)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Business Standard
177 22

Oil down on strong dollar, OPEC uncertainty

By Libby George

(Reuters) - prices slid on Friday, dragged by a strong dollar and uncertainty over whether OPEC will agree to cut production at the group's meeting next week, but benchmark contracts were on track to close the week with gains close to 4 percent.

Brent crude futures were trading at $48.53 a barrel at 1253 GMT, down 47 cents.

U.S. crude futures fetched $47.56 a barrel, down 40 cents. Overall activity on both contracts was thin after the U.S. Thanksgiving holiday and ahead of the weekend.

The main drag on prices was the dollar, which this week hit levels last seen in 2003 against a basket of other currencies. A strong dollar could crimp fuel demand due to higher costs for holders of other currencies.

Reports that state giant Saudi Aramco would in January increase supplies to some Asian customers also cast a shadow on markets, traders said.

A decline in China's October crude imports to their lowest on a daily basis since January added to the bearish tone.

But analysts said fundamentals were little changed - apart from concerns over the fate next week of a Saudi-led plan for the Organization of the Petroleum Exporting Countries and other producers to agree on cuts in crude output.

The market "is taking it easy ahead of a long weekend (in the United States) and uncertainty over OPEC," said Bjarne Schieldrop, chief commodities analyst with SEB Bank in Oslo. "There is no other big bearish news."

Schieldrop said prices could rebound if the Nov. 30 meeting succeeded in reaching a targeted production cap of 32.5 million to 33.0 million barrels per day (bpd), from the 33.64 million bpd the group pumped in October.

On Thursday, the minister of non-OPEC nation Azerbaijan said OPEC was also pushing producers outside the group to make big cuts in output.

Most analysts expect some form of cut, but it is uncertain whether that would be enough to prop up a market dogged by oversupply since 2014.

"market reaction will hinge on the credibility of the proposed action," U.S. investment bank Jefferies said, adding recent output increases to record levels in many countries now required a deep cut to lift prices significantly.

"The surge in OPEC output since August has shifted the market back into oversupply and re-balancing will be deferred until the second half of 2017 without a cut of at least 700,000 barrels per day."

(Additional reporting by Henning Gloystein in Singapore; Editing by Dale Hudson and Mark Potter)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

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