Oil prices drop before US inventory data

18/08/2016 05:03 AST

Oil prices fell back Wednesday after rallying in recent sessions, as attention turned to US stockpiles data for an update on levels of supplies in the world’s biggest crude consumer.

Around 1100 GMT, US benchmark West Texas Intermediate for delivery in September was down 43 cents at $46.15 a barrel. Brent North Sea crude for October delivery slipped 37 cents to $48.86 a barrel compared with the close on Tuesday.

Prices on Tuesday closed at five-week highs, bolstered by a weaker dollar and remarks from key oil producers on the state of the market, traders said.

Crude futures have surged after closing below $40 a barrel at the start of the month for the first time since April.

All eyes were meanwhile on the US Department of Energy as it prepares to publish weekly data on the country’s commercial crude stockpiles. Whatever the reading, analysts expect prices to fluctuate ahead of a September meeting in Algeria involving members and non-members of OPEC.

Saudi Oil Minister Khalid Al-Falih last week suggested that discussions could include actions to stabilize prices — widely seen as a suggestion that OPEC could revive talks on trimming high output levels.

Russian Energy Minister Alexander Novak said his country, a non-OPEC member, was working with Saudi to achieve oil market stability – hinting at possible cooperation on production. Analysts have voiced doubts however over a deal being struck.

“These oil summits have usually ended without an agreement, as was the case at an OPEC meeting earlier this year,” said OANDA market analyst Kenny Fisher.

“Iran, which has returned as a major producer after years of sanctions, scuttled that meeting and is unlikely to be agreeable to any cuts in production,” he added.

Saudi Gazette