Azernews.Az

Bloomberg

West Texas Intermediate resumed its decline after the biggest gain in almost two months as investors weighed the likelihood that OPEC will cut output when the group meets this month. Brent fell in London.

Futures dropped as much as 0.7 percent in New York as members of the Organization of Petroleum Exporting Countries step up diplomacy before their Nov. 27 meeting. Iran’s oil minister is preparing to visit the United Arab Emirates this week, according to Shana, the Tehran-based ministry’s news service. Prices may slide further as the market enters a period of weaker demand, the International Energy Agency said Nov. 14.

Oil has declined about 30 percent from a June peak as leading OPEC members resisted calls to cut output and instead reduced some export prices while U.S. production climbed to the highest level in more than three decades. Venezuela, Libya and Ecuador have asked for action to support crude as the 12-member group prepares to meet in Vienna.

“It’s all about OPEC, that’s the reality at the moment,” Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone today. “The market is really going to be focused on the outcome of the meeting. There doesn’t seem to be indications so far of a production cut.”

WTI for December delivery lost as much as 49 cents to $75.33 a barrel in electronic trading on the New York Mercantile Exchange and was at $75.41 at 1:49 p.m. Singapore time. The contract gained $1.61 to $75.82 on Nov. 14, the most since Sept. 16. The volume of all futures traded was about 59 percent above the 100-day average. Prices dropped 3.6 percent last week and are 23 percent lower this year.

OPEC Visits

Brent for January settlement fell as much as 61 cents to $78.80 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $3.48 to WTI for the same month. Front-month prices slid an eighth week through Nov. 14, the longest run of declines since the contract began trading in 1988.

Iran’s OPEC Governor Hossein Kazempour, national representative Mehdi Asali and the country’s head of the oil contracts committee Mehdi Hosseini will accompany minister Bijan Namdar Zanganeh to the U.A.E., Iran’s oil ministry said.

Iraqi President Fouad Masoum and Libyan Prime Minister Abdullah al-Thani flew to Riyadh last week for separate talks with Saudi officials. Rafael Ramirez, Venezuela’s foreign minister and representative to OPEC, held talks in Algeria and Qatar, while Saudi Arabia’s Al-Naimi toured Latin America.

Demand Slump

Oil consumption will slide by about 1 percent to 92.6 million barrels a day in the first quarter from the current three-month period, according to the Paris-based IEA. Barring new supply disruptions, the seasonal demand slump will push prices lower, it said in a monthly market report.

Speculators became more bullish on WTI for the first time in three weeks, judging that a slump in prices will force OPEC to act. The net-long position in the New York contract rose 8.7 percent in the week ended Nov. 11, U.S. Commodity Futures Trading Commission data show. Long holdings rebounded from the lowest level in 17 months while short bets contracted.