Brent and West Texas Intermediate crudes dropped as investors weighed the possibility that OPEC will agree to cut oil output next week.
Futures retreated as much as 1.1 percent in London and 0.9 percent in New York. OPEC member Venezuela met with Russia to discuss ways to support oil prices, the foreign ministry in Caracas said yesterday. The Organization of Petroleum Exporting Countries, responsible for about 40 percent of global supply, will discuss output at a Nov. 27 meeting in Vienna.
Oil has slumped into a bear market as the U.S. pumps at the fastest pace in more than three decades and growth in demand slows. Japan, the world’s third-biggest consumer, slid into a recession in the third quarter. Traders are also pondering the chances that talks over Iran’s nuclear program could result in an agreement.
“The market is divided over whether OPEC will decide to make a cut or not at next week’s meeting,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “I’m unsure they are ready, willing and able to do something, despite the meetings with Russia and each other.”
Brent for January settlement declined 79 cents, or 1 percent, to $78.52 a barrel on the London-based ICE Futures Europe exchange at 9:09 a.m. in New York. The volume of all contracts traded was 18 percent below the 100-day average for the time of day. Prices have decreased 29 percent this year.