Tuesday, 11 November 2014

Oil Drops Further On ‘No Output Cut’

Global oil prices remained below $78 a barrel after major producer Kuwait downplayed prospects for an OPEC output cut in the face of abundant global supplies.

US benchmark West Texas Intermediate for December dived $1.25, or 1.6 per cent, to close at $77.40 a barrel on the New York Mercantile Exchange. Brent North Sea crude for delivery in December closed in London at $82.34 a barrel, lowest price since October 2010, down $1.05 from Friday.

The Kuwaiti oil minister, Ali al-Omair, said earlier that OPEC was unlikely to cut crude output when it meets in Vienna on November 27 amid hopes the market will absorb surplus supplies.

Saudi Arabia, the biggest oil producer has also indicated it does not want to go it alone with a production cut, and it has been adjusting its official selling price to maintain market share, particularly in Asia.

Meanwhile, U.S. oil production continues to grow, and has been averaging above 8.9 million barrels a day for the past month, close to the just more than 9 million barrels a day produced by Saudi Arabia.

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