Oil prices fell on Friday as OPEC discussed a potential exemption from cutting output for Iran and as the producer club sought to get heavyweight supplier Russia on board.
International Brent crude oil futures LCOc1 fell below $60 per barrel, trading at $59.53 per barrel at 0750 GMT, down 53 cents, or 0.9 per cent from their last close.
US West Texas Intermediate (WTI) crude futures CLc1 were at $51.05 per barrel, down 44 cents, or 0.9 per cent.
The declines came after crude slumped by almost 3 per cent the previous day, with the Organisation of the Petroleum Exporting Countries (OPEC) ending a meeting at its headquarters in Vienna, Austria, on Thursday without announcing a decision to cut crude supply.
There was also still discussion around Iran seeking an exemption from any cuts amid US sanctions which already reduced its exports, OPEC delegates told Reuters.
OPEC also wants to get Russia on board with cuts. Russia wants to cut its oil output by a maximum of 150,000 barrels per day (bpd) for the first three months of 2019, RIA news agency cited a source as saying on Friday.
Analysts expect OPEC to cut more than Russia, but warn that a big cut will be needed to reverse recent price falls.
“Reversing the overwhelmingly bearish price sentiment will likely require a credible and cohesive message from the OPEC meeting. Even a 1 million bpd cut could lead to a ‘sell the news’ reaction in the short term,” US investment bank Jefferies said on Friday.
“If no agreement is reached, oil prices have significant downside,” it added.
SUPPLY SURGE, PRICE PLUNGE
Oil producers have been hit by a 30-per cent plunge in crude prices since October as supply surges just as the demand outlook weakens amid a global economic slowdown.
Oil output from the world’s biggest producers - OPEC, Russia and the United States - has increased by 3.3 million bpd since the end of 2017, to 56.38 million bpd, meeting almost 60 per cent of global consumption.
That increase alone is equivalent to the output of major OPEC producer the United Arab Emirates.
The surge is largely down to soaring US crude oil production, which has jumped by 2.5 million bpd since early 2016 to a record 11.7 million bpd, making the United States the world’s biggest oil producer.
As a result, the United States last week exported more crude oil and fuel than it imported for the first time on records going back to 1973, according to data released on Thursday.
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