In the course of today’s trading oil was moving smoothly as market participants receive mixed signals as to whether the leading oil exporters will agree to work together to eliminate the excess supply, which is observed for two years.
At the beginning of the European session, oil prices declined, however, they moved into positive territory after Reuters reported that Saudi Arabia is ready to cut production if Iran decides to limit its oil production.
Meanwhile, the representatives of Saudi Arabia and Iran are not in consultations this week to agree on how to define the levels at which can limit production. This was reported by Wall Street Journal.
Skepticism towards the OPEC meeting still persists. It is believed that the largest OPEC members, including Saudi Arabia, Iran and Iraq, will not be able to reach an agreement on the reduction or production restrictions. Geopolitical rivalry also aggravates the situation. In addition, these countries are fighting for market share.
“Even the agreement of the leading oil producers will not be positive in view of the current high level of offer. Prices may be supported only if they agree a clear and significant production cut, that under current conditions it is highly unlikely” – said Tamas Varga of PVM Oil Associates.
The cost of the November futures for US light crude oil WTI (Light Sweet Crude Oil) fell to 45.44 dollars per barrel on the New York Mercantile Exchange.
November futures price for North Sea petroleum mix of mark Brent fell to 46.93 dollars a barrel on the London Stock Exchange ICE Futures Europe.
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