Oil prices dipped early on Tuesday over disagreement within producer cartel OPEC on who should cut how much production in a planned coordinated reduction to prop up prices. International Brent crude oil futures were trading at $51.38 per barrel at 0117 GMT, down 8 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures were down 5 cents at $50.47 a barrel. Iraq’s oil minister Jabar Ali al-Luaibi said the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC) wanted to be exempt from output curbs as it needed more money to fight Islamic State militants.
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“Crude oil prices laboured under the weight of various OPEC members seeking exemption from the production cut agreement,” ANZ bank said on Tuesday.
Until there is more clarity on the planned cut, which OPEC hopes will be coordinated with non-members like Russia, analysts said oil prices would likely remain range-bound – but volatile – around current levels.
“Expect more of this choppy interplay until more concrete news emerges, as speculative buying runs into record producer selling of the futures contracts for hedging,” said Jeffrey Halley, senior market analyst at brokerage OANDA in Singapore.
The private American Petroleum Institute (API) is due to publish its weekly crude stocks estimates later on Tuesday, followed by the official Energy Information Administration (EIAD) data due on Wednesday.
U.S. crude inventory data is closely watched as a means to estimate the country’s supply overhang.