Oil set for longest losing streak in 16 weeks as OPEC convenes

Tokyo: Oil dropped a fifth day as Organization of Petroleum Exporting Countries (OPEC) ministers prepare to convene in Vienna to discuss production policy and industry data showed US inventories rose.

Futures fell as much as 0.5% in New York, extending its run of losses to the longest since February. US stockpiles rose by 2.35 million barrels last week, the American Petroleum Institute was said to report. Government data due Thursday is forecast to show a decline. Saudi Arabia is ready to consider a surprise deal with fellow OPEC members in an attempt to mend divisions, though no formal proposal has yet been made, according to delegates familiar with the situation.

Oil has surged about 85% from a 12-year low it touched earlier this year amid signs output from the US to China declined under pressure from OPEC’s strategy of sustaining production amid a global glut. Any new output agreement by Organization of Petroleum Exporting Countries will depend on Iran, which has so far rejected any cap on its supplies.

“There is a general expectation that there will be no change to the strategy,’’ Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “There seems to be no logical reason for the main players, such as Saudi, to change the course of action, particularly now that their strategy seems to be working.”

West Texas Intermediate for July delivery fell as much 24 cents to $48.77 a barrel on the New York Mercantile Exchange and was at $48.78 at 9:25am. Tokyo time. Total volume traded was about 80% below the 100-day average. The contract dropped 9 cents to close at $49.01 on Wednesday.

Brent for August settlement lost as much as 13 cents, or 0.3%, to $49.59 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a 34-cent premium to WTI for August delivery.

Source: Mint; 02 June 2016

URL: http://www.livemint.com/Industry/dNAcWANziNIRqKphxUpYMJ/Oil-set-for-longest-losing-streak-in-16-weeks-as-OPEC-conven.html

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