FU: Oil slumps most in week as industry meets before OPEC convenes
Crude oil declined the most in a week as energy ministers and officials gathered in Vienna to assess supply and demand before OPEC decides on production limits on June 5.
Brent fell as much as 2.7 percent to $63.74 a barrel, while U.S. West Texas Intermediate retreated 2.6 percent as of 11:34 a.m. in London. OPEC’s planned meeting to discuss output limits will finish quickly and without a cut in the collective target, Al-Hayat, a London-based Saudi newspaper, reported Wednesday, citing an OPEC official it didn’t identify. Iran’s oil minister told reporters at the gathering Wednesday that he’s delivering a letter to OPEC members, telling them to make room for an increase in the nation’s production.
Oil slumped last year as the Organization of Petroleum Exporting Countries maintained its production limit at 30 million barrels a day, insisting that suppliers outside the 12-nation group must help tackle a global surplus. Suhail Mohammed Al Mazrouei, United Arab Emirates energy minister, said at the Vienna seminar that he’s comfortable with price moves since the group last met in November. Saudi Arabia, the world’s largest exporter, is producing crude at the highest level in more than three decades.
“The view coming out of OPEC is hardening that there won’t be a cut which is adding to pressure on prices, as the surplus will remain,” Miswin Mahesh, London-based commodities analyst at Barclays Plc, said by phone. “The Saudis could have been more disciplined with their output but instead have produced at 10.3 million to 10.4 million barrels a day.”
