Oil Slips Before Doha Talks as IEA Sees Global Market Balancing
Mark ShenkApr 17, 2016 10:16 pm ET
(Bloomberg) — Oil slipped a second day as a meeting of major crude producers in Doha this weekend is seen having minimal impact on supplies.
Futures slipped 0.6 percent in New York. Delegates from OPEC and other oil-producing countries have started arriving in Doha, Qatar’s Energy Minister Mohammed Al Sada said in a statement on Thursday, noting a “positive feeling” ahead of the summit. Declines eased earlier as the International Energy Agency said in a report that global oil markets will “move close to balance” as lower prices take their toll on output outside OPEC.
“There’s all this talk about Doha in the market but even if they announce an agreement to freeze the impact will be minimal,” said Dan Heckman, senior fixed-income strategist in Kansas City, Missouri, at U.S. Bank Wealth Management, which oversees about $127 billion. “The Saudis and Russians are already pumping at near record levels.”
Oil prices, which sank to the lowest level in almost 13 years in February amid a global surplus, have rebounded in the past two months as producers work on a plan to cap supply. While 40 analysts and traders surveyed by Bloomberg were evenly split over whether the Doha talks will succeed, a majority of those who predicted a deal said it would have no impact on actual flows of crude.
West Texas Intermediate for May delivery dropped 26 cents to settle at $41.50 a barrel on the New York Mercantile Exchange. The contract dropped 1 percent to $41.76 on Wednesday after rising 13 percent the previous three sessions.
U.S. crude inventories rose by 6.6 million barrels last week to 536.5 million, the most since 1930, according to the Energy Information Administration. Crude production fell to 8.977 million barrels a day last week, agency data show. It was the first decline bellow 9 million barrels in 18 months.
OPEC said Wednesday it may deepen cuts to its forecast for global oil demand growth due to slowing economic expansion in emerging markets, warmer weather and the removal of fuel subsidies.
Iran’s crude shipments have risen by more than 600,000 barrels a day this month, adding to the pressure facing producer nations as they prepare to meet in Doha.
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