Oil declined amid doubts producers will agree on a deal to stabilize the market when suppliers meet next month for informal talks.
Futures decreased as much as 1.6 percent in New York after rising the previous two sessions. The oil market should achieve stability soon, United Arab Emirates Oil Minister Suhail Al Mazrouei said in a Twitter post. Iran’s plan to continue boosting crude output until it regains its pre-sanctions OPEC market share is dimming prospects of collective action, according to Patrick Allman-Ward, chief executive officer of Dana Gas PJSC.
Oil entered a bull market Aug. 18, less than three weeks after tumbling into a bear market, as prices surged partly on speculation that discussions among members of the Organization of Petroleum Exporting Countries may lead to action to stabilize the market. A deal to freeze output was proposed in February, but a meeting in April ended with no final accord.
“The likelihood of them actually agreeing to some kind of production freeze is relatively low,” Daniel Hynes, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney, said in a Bloomberg television interview. “It’s certainly been so far a successful jawboning exercise.”
West Texas Intermediate for October delivery dropped as much as 75 cents to $46.89 a barrel on the New York Mercantile Exchange and was at $46.98 at 1:35 p.m. in Hong Kong. The contract gained 31 cents to $47.64 on Friday, trimming a weekly decline. Total volume traded was about 30 percent below the 100-day average. Prices slid 1.8 percent last week.
Brent for October settlement lost as much as 64 cents, or 1.3 percent, to $49.28 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude was at a premium of $2.34 to WTI.
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Any decision to stabilize the market will require the full participation of all OPEC members and major suppliers from outside the group, Al Mazrouei said. The U.A.E. is the fourth biggest OPEC producer, pumping 2.93 million barrels a day in July. Saudi Arabian output was 10.43 million a day the same month.
While Iran supports action to stabilize the market, it won’t participate in a freeze in output before regaining its pre-sanctions share of OPEC production, state-run news service Shana reported Friday, citing Oil Minister Bijan Namdar Zanganeh. China Petroleum & Chemical Corp., known as Sinopec, posted a 19.9 billion yuan ($3 billion) in profit for the first half of the year as its fuel-making business helped it weather the worst oil crash in a generation. The U.S. drill rig count remained unchanged at 406 through Aug. 16 after eight weeks of gains, according to data from Baker Hughes Inc. on Friday.