Oil down on OPEC doubts as it floats six-month output cap plan

Tue Oct 11, 2016 8:28pm EDT
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices on Tuesday retreated from one-year highs, after OPEC said it was trying to reach a global agreement to cap production for at least six months amid doubts about how much that would reduce a crude glut.

The International Energy Agency, the energy watchdog of the West, said it was unclear how rapidly global oil supply could fall in line with demand even if the Organization of the Petroleum Exporting Countries and major producer Russia agreed on a steep output cut. [IEA/M]

"Net, we find that an agreement to cut production, while increasingly likely, remains premature given the high supply uncertainty in 2017," Goldman Sachs said in a note.

Such a deal would be "self-defeating if it were to target sustainably higher oil prices," Goldman said.

Oil has rallied than 13 percent in less than two weeks since OPEC proposed its first production curbs in eight years. Still, prices remain about half of mid-2014 highs above $100 a barrel.

On Tuesday, Brent crude settled down 73 cents, or 1.4 percent, at $52.41 a barrel, retreating from a one-year high of $53.73 hit on Monday.

U.S. West Texas Intermediate (WTI) crude fell 56 cents, or 1 percent, to settle at $50.79.

Global oil industry officials in Istanbul for the World Energy Conference issued a raft of statements on OPEC's production plan.   Continued...

A worker checks the valve of an oil pipe at an oil field owned by Russian state-owned oil producer Bashneft near the village of Nikolo-Berezovka, northwest of Ufa, Bashkortostan, Russia January 28, 2015. REUTERS/Sergei Karpukhin/File Photo