Oil prices static on uncertainty over planned production cut

Most analysts believe that some form of a production cut will be agreed, though it is uncertain whether this will be enough to prop up a market that has been dogged by a fuel supply overhang for over two years.

By: Reuters | Singapore | Published:November 24, 2016 8:13 am
oil prices, US oil prices, crude oil, OPEC, oil news, business news, commodities news, latest news, indian express Traders said market activity was low due to the U.S. holiday, and there was a reluctance to take on big price. (File)

Oil prices were little changed on Thursday as uncertainty ahead of a planned OPEC-led crude production cut and thin liquidity due to the U.S. Thanksgiving holiday kept traders from making big new bets on markets. International Brent crude oil futures were trading at $48.90 at 0209 GMT, down 5 cents from their last close.

US West Texas Intermediate (WTI) crude futures were at $47.94 per barrel, down 2 cents from their last settlement.

Traders said market activity was low due to the U.S. holiday, and there was a reluctance to take on big price directional bets due to uncertainty about a planned oil production cut, led by the Organization of the Petroleum Exporting Countries (OPEC).

OPEC is due to meet on Nov. 30 to coordinate a cut, potentially together with non-OPEC member Russia, but there is also disagreement within the producer cartel as to which member states should cut and by how much.

“The Thanksgiving Holiday today has thinned traders interest … but the OPEC result next Wednesday is the only game in town for energy traders,” said Jeffrey Halley, senior market analyst at OANDA brokerages in Singapore.

Most analysts believe that some form of a production cut will be agreed, though it is uncertain whether this will be enough to prop up a market that has been dogged by a fuel supply overhang for over two years.

Beyond OPEC, traders said the strong U.S.-dollar, which is at levels last seen in 2003 against a basket of other leading currencies, was influencing oil prices. A strong dollar, in which oil is traded, makes fuel purchases more expensive for countries using other currencies at home, potentially crimping demand.