Crude futures edged upwards on Thursday as traders awaited an official output decision from a meeting of Organisation of the Petroleum Exporting Countries (Opec) oil ministers in the Qatari capital of Doha.
Prices were briefly jolted higher in mid-afternoon trade after Opec kingpin Saudi Arabia expressed support for a production cut of one million barrels from the powerful cartel’s actual daily output.
New York’s main contract, light sweet crude for delivery in November, gained 25 cents to $57,90 per barrel in pit trading. London’s Brent North Sea crude for December delivery won 12 cents to $59,70 per barrel in electronic deals.
Over the past two weeks, mixed signals from Opec have helped push crude prices lower owing to uncertainty surrounding the planned reduction.
Saudi Arabia’s Oil Minister, Ali al-Nuaimi, speaking in Doha on Thursday, said Opec would cut one million barrels per day (bpd) from its current production, which is beneath the official quota of 28-million bpd.
He added that Opec had not ruled out a further reduction in output when the 11-nation cartel meets in the Nigerian capital of Abuja on December 14.
Asked if his country supported the planned one million bpd output cut expected to be formalised at the meet, Nuaimi replied: ”Absolutely.”
The meeting of Opec ministers was set to begin on Thursday from about 8pm (5pm GMT).
The Doha huddle comes as crude futures have fallen beneath $58 in recent days — a drop of more than 25% from record highs above $78 in July and August.
Traders remain unclear whether Opec would decide to cut its official quota or slash actual production — which, excluding Iraq, is estimated at between 27,5-million and 27,8-million bpd.
”Uncertainty remains over exactly which output the cartel is planning to reduce — actual or notional output,” Sucden analyst Michael Davies said earlier on Thursday.
New York crude had slumped by $1,28 on Wednesday to close at $57,65, after earlier falling as low as $57,35 — which was not far off its 2006 low.
On Wednesday, oil prices fell heavily as a larger-than-expected increase in United States crude-oil reserves countered the effect of a surprise plunge in heating-fuel stocks.
The US Department of Energy said that distillate stocks, such as heating fuel and diesel, tumbled by 4,5-million barrels to 145,4-million in the week to October 13. That was far more than the expected fall of 800 000 barrels.
The reading came after heavy early snowfalls in the US north-east that sparked a spike in demand for heating fuel.
Crude oil inventories rose 5,1-million barrels to 335,6-million over the past week, in which several US refineries were down for maintenance ahead of the winter peak for heating oil. Analysts had expected a rise of 1,5-million. — Sapa-AFP