Home / Markets / Commodities /  Global oil prices slip on easing fears of imminent output cut

NEW DELHI: Having surged nearly 4% in the previous session, international crude oil prices slipped on Wednesday on easing fears of an imminent cut in output by the Organization of the Petroleum Exporting Countries and allies, or OPEC+.

Around 1155 am, India time, the October Brent contract on the Intercontinental Exchange was at $99.76 per barrel, down 0.46% from previous close. West Texas Intermediate (WTI) futures on the NYMEX were down 0.31% at $93.45 a barrel.

On Tuesday, oil prices had surged after the energy minister of Saudi Arabia, a major stakeholder in OPEC, spoke about the need for supply cuts by the cartel given the recent fall in prices. The minister was of the view that current prices do not reflect the tightness in the oil market.

Ravindra Rao, head of commodity research at Kotak Securities, said, “NYMEX crude traded in a range above $93/bbl amid mixed API report which noted a bigger than expected 5.63 million barrels decline in US crude oil stocks but also an unexpected rise in gasoline stocks.“

“Crude is range-bound also as support from Saudi’s willingness to cut production and increased fuel switching due to rising gas prices is countered by progress in Iran’s nuclear talks and demand concerns amid slower economic activity globally," he added.

Rahul Kalantri, vice president for commodities at Mehta Equities Ltd., noted that oil prices surged on Tuesday amid prospects of a drop in US inventories and Saudi Arabia floating the idea of output cuts by OPEC+ in the case of Iranian crude oil supply returning to the market.

Despite concerns of production cut, the prospect of resumption in Iranian crude supply and fears of a recession, along with consecutive weekly increase in US crude oil stocks, easing gasoline demand, and the upcoming refinery maintenance season pushed prices lower on Wednesday, Kalantri said.

“We expect crude oil prices to remain volatile in today’s session," he added.

ABOUT THE AUTHOR

Rituraj Baruah

Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
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