Oil down 2 pct on OPEC glut worries; U.S. rigs up by two

Fri Nov 11, 2016 3:19pm EST
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By Ethan Lou

NEW YORK (Reuters) - Oil prices settled down more than 2 percent on Friday after OPEC said October output reached another record, casting doubt on whether its plan to limit production is achievable or enough to ease persisting oversupply in the market.

The Organization of the Petroleum Exporting Countries (OPEC) said Friday that its output rose to 33.64 million barrels per day (bpd) last month, up 240,000 bpd from September.

OPEC plans to cut or freeze output, but investors are skeptical that such a deal will be reached during the cartel's Nov. 30 meeting and also concerned that whatever agreement reached would not be effective.

Based on its record October output, OPEC would have to trim up to a million barrels per day of output to make good on its promise to reduce production to between 32.50 million bpd and 33.0 million bpd.

"The fact that they were already producing an increased amount certainly makes whatever cuts they may want to make more difficult," said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.

International Brent crude futures LCOc1 settled at $44.75 per barrel, down $1.09, or 2.4 percent. It had reached a low of $44.19, the lowest since August.

U.S. West Texas Intermediate (WTI) futures CLc1 were down by $1.25, or 2.8 percent, to $43.41 per barrel, after recovering from a low of 43.04.

The benchmarks' session lows were more than 3 percent lower than their previous settlement. Brent and WTI settled down about 2 percent lower for the week.   Continued...

Gas flares from an oil production platform at the Soroush oil fields in the Persian Gulf, south of the capital Tehran, July 25, 2005.  REUTERS/Raheb Homavandi/File Photo