Online

See all articles

Oil steady ahead of Opec meeting

Prices change little as market waits to see if producer cartel extends output cuts

Oil prices were mixed in early Asian trade on Friday as the market waited to see whether major oil producers would extend supply cuts beyond March at a meeting in Vienna later in the day.

International benchmark Brent crude futures were at $56.35 a barrel early on Friday, down 8 cents, or 0.1%, from their last close.

US West Texas Intermediate crude futures were up 5 cents, or 0.1%, at $50.60 per barrel.

Opec and other producers are set to meet in Vienna at 0800 GMT on Friday to discuss a possible extension of an oil supply cut deal to prop up prices.

Goldman Sachs said that talks over extending cuts are "noteworthy but premature", adding "we believe it is unlikely that committee will recommend extension of cuts this week."

Michael McCarthy, chief market strategist at CMC Markets in Sydney, predicted there will be "strong rhetoric but whether or not they will be able to boost oil prices from current high levels is another question".

There will be some focus on whether Nigeria and Libya, who have been exempt from the curbs, will join any future cuts. The two Opec members have both been invited to the meeting.

"The market is still split as to whether the meeting will bring fresh supply cuts to the table," ANZ bank said in a note.

"With US stockpiles remaining elevated, a firm signal about lower supply is likely needed for price momentum to remain positive."

Opec and some non-Opec producers including Russia first agreed in November last year to cut their output by around 1.8 million barrels per day to clear global oversupply and support prices.

Despite their concerted efforts - the oil cartel extended their supply cuts until the end of March - prices have remained depressed amid increasing US oil production.

The Energy Information Administration (EIA) reported on Wednesday that US crude production reached 9.51 million bpd in the week ended 15 September, up from 8.78 million bpd a week ago.