Oil halts advance after four-day gain

(iStock)
(iStock)

Hong Kong - Oil halted its advance after a four-day gain before OPEC meets on Thursday to decide on prolonging output cuts by the group and its partners.

July futures dropped 0.9% in New York after front-month prices on Monday capped a 4.3% increase over four sessions. Iraq backed a proposal to extend production curbs into 2018, adding to growing support for longer cuts to clear a global glut.

In the US, crude inventories probably slid by 2 million barrels last week, according to a Bloomberg survey before data from the Energy Information Administration on Wednesday.

Oil has climbed as Saudi Arabia and non-OPEC member Russia rally support for a nine-month extension to the output-cut deal by the Organisation of Petroleum Exporting Countries and its allies. OPEC will meet in Vienna. While stubbornly high global inventories have taken longer-than-expected to drain, signs that US supplies are starting to ease is adding to optimism.

“There are still negative pressures in the form of US crude production and inventories,” said David Lennox, a resource analyst at Fat Prophets in Sydney.

“The market is taking confidence from the likely extension of output cuts, but we’re not looking for any significant move higher.”

West Texas Intermediate for July delivery slid as much as 48 cents to $50.65 a barrel on the New York Mercantile Exchange and was at $50.73 a barrel at 09:08. Total volume traded was about 20% above the 100-day average. The June contract expired on Monday after advancing 0.8% to $50.73.

Brent for July settlement fell 52c to $53.35 a barrel on the London-based ICE Futures Europe exchange. Prices climbed 26c to $53.87 on Monday. The global benchmark traded at a premium of $2.73 to July WTI.

Saudi Arabia’s Minister of Energy and Industry  Khalid Al-Falih secured Iraq’s backing for a nine-month extension after talks in Baghdad with counterpart Jabbar Al-Luaibi. Non-OPEC nations Oman and Mexico also confirmed their support for prolonging the curbs through the first quarter of 2018.

Oil-market news:

The White House plan to trim the national debt includes selling off half of the nation’s emergency oil stockpile, part of a broad series of changes proposed by President Donald Trump to the federal government’s role in energy markets.

China’s diesel exports fell to a three-month low, easing from a record as the volumes fuel makers were allowed to sell overseas declined and the nation’s oil refiners slowed as seasonal maintenance picked up.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
15.34
(+0.14)
ZAR/GBP
20.43
(+0.32)
ZAR/EUR
18.19
(+0.13)
ZAR/AUD
11.23
(-0.15)
ZAR/JPY
0.15
(+0.44)
Gold
1802.79
(-1.82)
Silver
23.14
(-1.62)
Platinum
958.00
(+3.44)
Brent Crude
45.51
(+2.15)
Palladium
2342.00
(+0.60)
All Share
57761.92
(+1.08)
Top 40
53049.43
(+1.09)
Financial 15
11674.99
(+2.97)
Industrial 25
80126.12
(+0.26)
Resource 10
52568.48
(+1.54)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
22% - 318 votes
No, I did not.
51% - 751 votes
My landlord refused
27% - 405 votes
Vote