London, UK | – Oil traded near $48 a barrel in New York as OPEC members failed to agree on the role of Iraq and Iran in a supply deal just one week before the group’s official summit.
Futures were little changed after preliminary talks in Vienna ended Tuesday without finalizing whether OPEC’s second- and third-largest producers will participate in production cuts. The matter will be deferred until the ministerial meeting on Nov. 30, two delegates said. In the U.S., crude stockpiles fell last week, according to industry figures, while a Bloomberg survey showed a gain.
Oil has remained volatile amid speculation that the Organization of Petroleum Exporting Countries may fail to implement output cuts first outlined in September. Iran is boosting production and Iraq is seeking an exemption because of its war with Islamist militants. Saudi Arabia’s Energy Minister Khalid Al-Falih has expressed optimism a deal can be reached, and traders and analysts had grown more confident this week that a consensus is possible.
“OPEC has to come up with some sort of an agreement, otherwise it’s a big loss of credibility, especially after Saudi Arabia has been quite outspoken about getting a deal,” said Norbert Ruecker, head of commodity research at Julius Baer Group Ltd. in Zurich. “There are many stumbling blocks. Iran and Iraq’s participation has been exactly what they have struggled with in the past two months.”
WTI for January delivery traded at $47.97 a barrel, down 0.1 percent, on the New York Mercantile Exchange at 11:58 a.m. London time. Prices fell 21 cents to $48.03 on Tuesday. Total volume traded Wednesday was about 3 percent above the 100-day average.
Brent for January settlement was unchanged at $49.12 a barrel on the London-based ICE Futures Europe exchange, a $1.15 premium to WTI. The global benchmark crude advanced 0.5 percent on Tuesday.
The results of Tuesday’s talks will be presented to ministers next week, Libya’s OPEC Governor Mohamed Oun said, declining to comment on whether Iran and Iraq are willing to limit output. Under the group’s preliminary accord reached late September in Algiers, collective output would drop to as little as 32.5 million barrels a day. That compares with its estimated October production of 33.6 million a day.
Meanwhile, U.S. stockpiles fell by 1.28 million barrels last week, the industry-funded American Petroleum Institute reported Tuesday, according to people familiar with the figures. Bloomberg’s survey forecast a 1 million-barrel gain. The government will release the data later Wednesday.
Russia, the world’s biggest energy exporter, still plans to hold talks with OPEC on Nov. 28, Russian Energy Minister Alexander Novak said in Moscow.