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.