Crude oil prices fell by more than $1/bbl on Sept. 27 on both New York and London markets awaiting Sept. 28 informal talks by members of the Organization of Petroleum Exporting Countries and ahead of a possible decline in the weekly US oil inventory.
OPEC members were expected to informally discuss oil production levels on the sidelines of another energy conference in Algeria. Saudi Arabia said it might be willing to discuss cutting its own production by 500,000 b/d. But no such agreement is expected until OPEC’s formal meeting in November in Vienna.
Some analysts suggest Saudi Arabia’s offer to trim production by 500,000 b/d would be inadequate to balance the market and help shift world oil prices higher.
Olivier Jakob of Switzerland-based Petromatrix called the offer a “trick.” In a note, Jakob said, “A meaningful OPEC deal requires Saudi Arabia to cut by at least 1 million b/d and not just by its usual summer-to-winter seasonal variation, but we see no signs that this is about to happen.”
The natural gas contract for October edged down less than a penny to remain at a rounded $2.99/MMbtu. On the spot market, the Henry Hub gas price dropped 2¢ to $3.03/MMbtu.
Heating oil for October fell 3.9¢ to a rounded $1.41/gal. The price for reformulated gasoline stock for oxygenates blending was down nearly 1¢ to a rounded $1.39/gal.
The November Brent crude contract on London’s ICE fell $1.38 to settle at $45.97/bbl and the December contract dropped $1.41 to settle at $46.52/bbl. The October gas oil contract settled at $410/tonne, down $15.75.
The average price for OPEC’s basket of benchmark crudes on Sept. 27 was $42.30/bbl, up 14¢.
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