Oil declined for a second day as Opec’s internal disagreements undermined efforts among major suppliers to reach an agreement in Vienna on trimming output to support prices.
Futures fell as much as 1.1 percent in New York after sliding 2.1 percent at the end of last week. The Organization of Petroleum Exporting Countries ended a meeting on Friday without reaching a deal on country quotas, according to delegates who took part in the discussions. Non-Opec nations finished talks with the group on Saturday without any supply commitments, Brazil’s Oil and Gas Secretary Marcio Felix said. Brazil attended as an observer.
Oil has fluctuated near $50 a barrel amid uncertainty over whether Opec can implement the first supply cuts in eight years at its official November meeting. As the gathering opened in Vienna last week, Opec Secretary-General Mohammed Barkindo warned of the consequences if producers don’t follow through on an agreement to reduce output. The price recovery has already taken far too long and suppliers can’t risk delaying it further, he said.
“Talks over the weekend make it seem less likely there will be an agreement on production cuts,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The market has probably made a fair bit of the adjustment, but I wouldn’t be surprised to see oil fall further into the $47 range.”
West Texas Intermediate for December delivery dropped as much as 53 cents to $48.17 a barrel on the New York Mercantile Exchange, and was at $48.42 at 8:01 a.m. in London. The contract fell $1.02 to $48.70 on Friday. Total volume traded was about 17 percent below the 100-day average. Prices are set for a third monthly gain, up 0.4 percent in October.
Brent for December settlement, which expires Monday, lost as much as 42 cents, or 0.8 percent, to $49.29 a barrel on the London-based ICE Futures Europe exchange after falling 1.5 percent Friday. Front-month prices are up 0.7 percent this month. The global benchmark traded at a premium of 99 cents to WTI. The more-active January contract slid 29 cents to $50.39 a barrel.
Opec agreed in Algiers last month to trim output to a range of 32.5 million to 33 million barrels a day and is due to finalize the deal at its Nov. 30 summit in Vienna. The accord helped push prices to a 15-month high above $50 a barrel earlier this month, although they have subsequently fallen amid doubts the group will follow through on the pledge. More than 18 hours of talks over two days in the Austrian capital this weekend yielded little more than a promise that the world’s largest producers would keep on talking.