Oil rebounds from three-month lows on renewed hopes for OPEC cut

Mon Nov 14, 2016 4:31pm EST
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By Devika Krishna Kumar

NEW YORK (Reuters) - Oil prices were largely steady on Monday, rebounding from three-month lows, on a report saying that OPEC members were seeking to resolve their differences on a deal to cut production ahead of a meeting later this month.

OPEC kingpin Saudi Arabia and fellow exporters Iran and Iraq have been at odds over how to rein in supply to reduce a glut in global markets. The lack of agreement within the Organization of the Petroleum Exporting Countries following a tentative deal in September has put pressure on benchmark prices.

Qatar, Algeria and Venezuela were leading the push to overcome the divide between the group's biggest producers ahead of an output policy meeting on Nov. 30 in Vienna, according to a Bloomberg report. (bloom.bg/2eTLwNI)

Saudi Arabia, Iraq and Iran are still at odds over how to share output cuts, the report said.

Saudi Energy Minister Khalid al-Falih said it was imperative for OPEC to reach a consensus on activating the deal made in September in Algiers to cut production, according to Algeria's state news agency APS on Sunday.

Brent crude futures LCOc1 settled at $44.43 per barrel, down 0.72 percent, after falling to as low as $43.57. U.S. crude CLc1 ended the session down 0.2 percent at $43.32, after hitting a low of $42.20. Both benchmarks' session lows were the weakest since Aug. 11.

"Record OPEC production clearly has the market nervous about a potential deal, but we believe that most OPEC producers are already producing flat out as much as they can," said Michael Tran, director of energy strategy at RBC Capital Markets in New York.

"The current aggressive push in production is to be expected given that each producing country is trying to position itself ahead of the meeting later this month."   Continued...

A pump jack stands idle in Dewitt County, Texas January 13, 2016.   REUTERS/Anna Driver