Oil dips in Asia as Algiers meeting looms

Oil prices edged down in Asia today amid continued speculation over whether producers will agree to limit output at talks in Algeria this week, analysts said.

Members of the Organisation of the Petroleum Exporting Countries will meet Wednesday with key non-OPEC producer Russia on the sidelines of the International Energy Forum in Algiers.

They are expected to discuss ways to stabilise prices that have been depressed since 2014 amid a stubborn supply glut, with hopes producers might agree a production cap.

But while most oil producer states have been supportive of a cap, pre-forum talks between OPEC kingpin Saudi Arabia and Iran have been less productive, with neither side willing to give in.
 

The UAE has meanwhile said it supports a deal to freeze output if other nations agree but that production cuts are not up for discussion, according to Bloomberg News, which also reported that Nigeria backs reaching deal.

At about 0330 GMT, US benchmark West Texas Intermediate for November delivery was down nine cents to USD 45.84 while Brent crude was down 19 cents to USD 47.16. Prices had jumped around 3.0 per cent yesterday.

"The markets are waiting for more news out of Algeria. Trading has been thin so what we're seeing is mostly early-morning profit taking in Asia," OANDA senior market analyst Jeffrey Halley told AFP.

A previous attempt in April to reach a production cap was scuppered by Iran, which refused to take part in talks after it had just come out after years of Western-imposed nuclear-linked sanctions.

"Trading has been volatile and sentiment seemingly entirely driven by speculation on the outcome of a deal," Alex Furber, a senior client executive at CMC Markets said in an email commentary.

"The last meeting in Doha in April was a complete non-event and key figures have down-played the chances of the (Algeria) meeting procuring a clear outcome," he added.

Crude prices have been battered since late 2014 by supply that has far outweighed demand, with prices hitting 13-year lows earlier this year.

Traders will also be watching for crude stockpile data from industry group the American Petroleum Institute due Wednesday, which will offer an indication of official US stockpile data.