Hong Kong - Oil dropped for a third day after industry data showed US crude stockpiles expanded as Russia said it preferred freezing output at current levels rather than cutting production.
Futures declined as much as 1.5% in New York after closing below $50 a barrel on Tuesday for the first time in more than a week.
US crude inventories increased by 4.75 million barrels last week, the American Petroleum Institute was said to report. Energy Information Administration data Wednesday is forecast to show supplies rose. Output cuts are not an option for Russia, the nation’s envoy to OPEC said, according to Interfax.
Oil has fluctuated near $50 a barrel amid uncertainty about whether the Organization of Petroleum Exporting Countries can implement the first output cuts in eight years and attract producers from outside the group, mainly Russia, to join the plan.
An OPEC committee will meet this week to try to resolve differences over how much individual members should pump, with Iraq saying it should be exempt because of conflict with Islamic militants.
“There is a potential for oil to return to the bottom of the range in the low $40s,” said Michael McCarthy, chief market strategist in Sydney at CMC Markets. “The official US inventory data will be a crucial number for the market. The possibility for a lasting OPEC agreement is very low.”
West Texas Intermediate for December delivery dropped as much as 75 cents to $49.21 a barrel on the New York Mercantile Exchange, and was at $49.29 at 08:50. The contract fell 56c to $49.96 on Tuesday, the lowest close since October 17. Total volume traded was about 28% below the 100-day average.
US stockpiles
Brent for December settlement lost as much as 66c to $50.13 a barrel on the London-based ICE Futures Europe exchange. Prices closed down 67c at $50.79 a barrel on Tuesday, the lowest settlement since September 30. The global benchmark traded at a 90c premium to WTI.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, dropped by 2.26 million barrels last week, the API said on Tuesday, according to people familiar with the figures. Nationwide crude inventories probably increased by 2 million barrels, according to the median estimate in a Bloomberg survey before the EIA report.
Oil-market news:
OPEC Secretary-General Mohammed Barkindo said the 14-nation group is facing its toughest challenge as members debate oil-production cuts needed to balance the market.
There’s still a chance that Iraq can resolve a dispute with OPEC over the level of its current output, Iraq’s Prime Minister Haider Al-Abadi said at a press conference in Baghdad.
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