Oil Falls As OPEC Might Leave Supply Unchanged

Brent oil fell to a four-year low amid signs the Organization of Petroleum Exporting Countries isn’t prepared to tackle the global supply glut. West Texas Intermediate was little changed in New York

Futures dropped as much as 1.4 percent in London. The oil market is oversupplied, partly because of rising U.S. output, United Arab Emirates Energy Minister Suhail Al Mazrouei told reporters today in Abu Dhabi. OPEC members including Saudi Arabia and Iraq are resisting calls to cut output and instead reduced export prices to the U.S., where production is running at the highest level in more than 30 years. The group meets on Nov. 27 in Vienna.

“Brent is falling as we parse all of the OPEC posturing,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “The UAE statement today that it’s not responsible for the glut along with the Iraqi price cut to the U.S. don’t show a willingness to cut. There’s nothing to ease bearish market sentiment.”

Brent for December settlement fell 39 cents, or 0.5 percent, to $81.95 a barrel on the London-based ICE Futures Europe exchange at 9:13 a.m. in New York. Futures slipped to $81.23, the lowest level since October 2010. The volume of all futures traded was 18 percent above the 100-day average for the time of day.

WTI for December delivery dropped 10 cents to $77.30 a barrel on the New York Mercantile Exchange. Volume was 13 percent higher than the 100-day average. The U.S. benchmark traded at a $4.65 discount to Brent, compared with $4.94 at yesterday’s close.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza