Oil falls by most in a week since January on OPEC tensions

Fri Nov 4, 2016 3:27pm EDT
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By Scott DiSavino

NEW YORK (Reuters) - Oil futures on Friday fell by their biggest weekly percentage decline since January of around 9 percent as signs of tensions resurfaced between Saudi Arabia and Iran that could scupper a key supply cut pact.

Traders also noted a surge in U.S. crude inventories last week and muted demand continued to weigh on futures.

Old disputes between Saudi Arabia and rival Iran resurfaced at a meeting of OPEC experts last week, with Riyadh saying it could raise oil output steeply to bring prices down if Tehran refuses to limit its supply, sources from the Organization of the Petroleum Exporting Countries (OPEC) told Reuters.

The meeting was intended to work out the details of cuts ahead of the next OPEC meeting on Nov. 30 following a decision to reduce output in Algiers to 32.50-33.0 million barrels per day in order to boost prices.

"Oil prices have been down all week because we're seeing some of the OPEC countries' negotiating stances, half of which are in the public. That is lowering people's expectations of a future agreement to cut or cap production," said James Williams, president of energy consultant WTRG Economics in Arkansas.

Both benchmarks settled at their lowest levels since September with Brent LCOc1 down 77 cents, or 1.7 percent, at $45.58 a barrel, and U.S. crude CLc1 down 59 cents, or 1.3 percent, at $44.07. That put both contracts down 15 percent since their early October highs.

Both futures fell for a sixth day in a row, the longest such streak for U.S. crude since July and Brent since June.

For the week, U.S. crude was down about 9 percent and Brent down about 8 percent, the biggest weekly losses for both since January.   Continued...

An oil well pump jack is seen at an oil field supply yard near Denver, Colorado, U.S., February 2, 2015.    REUTERS/Rick Wilking/File Photo