Oil drops with producers' meeting, US data on horizon

Oil prices dipped today with analysts expecting volatility in the run-up to a producers' meeting next week, while traders are also awaiting the release of US stockpiles data.

Around 1130 GMT, Brent North Sea crude for delivery in November was down 48 cents at USD 45.46 a barrel compared with today's close.

US benchmark West Texas Intermediate for October shed 35 cents to USD 42.95 a barrel.

The commodity plunged last week on supply glut worries but bounced slightly Monday after OPEC member Venezuela said a deal to limit output was close.

Unrest in key producers Libya and Nigeria also raised the prospect their exports would be hit.
 

Venezuelan President Nicholas Maduro said Sunday that participants in producer talks by the 14-nation OPEC cartel and Russia in Algeria from September 26-28 are working on a deal.

But some analysts said that in the absence of any firm agreement, prices will continue to swing.

"The credibility of bullish production freeze rhetoric from Venezuela is understandably being questioned in the run-up to next week's Algiers meeting, while worries about additional supply (Nigeria, Libya) worsening the global glut add to the mix," noted analysts at traders Accendo Markets.

Crude prices have been dogged by a stubborn supply glut since mid-2014, with prices hitting near 13-year lows in February.

A previous Saudi-led attempt to freeze output fell apart in April when Iran, which had just emerged from years of Western nuclear-linked sanctions, refused to take part.

CMC Markets Singapore analyst Margaret Yang said traders are also "waiting for this week's (US) crude inventory data to find clues of any changes of the supply-demand relationship".

The US energy department is due to release the stockpiles figures tomorrow.

"Gains on Monday were wiped out in trading on Tuesday for oil, as many analysts predict a significant increase in US inventories of over two million barrels, which would indicate ongoing global oversupplies," said analyst Bill Hodder at broker Love Energy.

"These concerns were backed up by comments from Venezuelan Oil Minister Eulogio Del Pino, who suggested that global production would need to be reduced by around 10 percent in order to fall back in line with consumption.