Oil prices eased lower on Wednesday, November 23, as investors doubt that the Organisation of Petroleum Exporting Countries, OPEC, would agree to a large enough production cut to significantly reduce the supply glut in the global market.
International Brent crude futures LCOc1 were down 6 cents at $49.06 a barrel by 1313 GMT (8:13 a.m. ET). The price has moved in a narrow band for most of the day after reaching a high of $49.42 a barrel in early trade.
U.S. West Texas Intermediate (WTI) crude oil futures CLc1 fell 12 cents to $47.91 a barrel after rising to $48.30 earlier on Wednesday.
Reuters commodities analyst Wang Tao said Brent could rise to $49.85 per barrel, a level marked by several technical resistance factors.
“Yesterday you saw the price action, it closed close to unchanged. It’s uncertain whether OPEC can do a deal. The market is divided in its opinion … that’s why the market is not moving much,” said Olivier Jakob of Petromatrix consultancy in Switzerland.
Many traders anticipate some agreement at OPEC but doubts remain that the aim, proposed by Algeria, of cutting output by 4 to 4.5 percent, or over 1.2 million barrels per day according to Reuters calculations, may not be reached.
The deal’s success hinges on an agreement from Iraq and Iran, which may not give their full backing, three OPEC sources said Tuesday. In September, OPEC agreed to bring total output down to the level of 32.5-33.0 million barrels a day.
Analysts said investors were unwilling to push crude prices to $50 a barrel or higher in the short term.
Investors are also awaiting U.S. government data on crude and refined product stockpiles due later on Wednesday.
U.S. crude inventories have jumped dramatically in the last few weeks and gained 5.3 million barrels in the week to Nov. 11. A Reuters poll showed crude stocks are expected to rise by 700,000 barrels while distillates will fall and gasoline rise.
Carsten Fritch, an analyst at Commerzbank in Frankfurt, said the U.S. data would likely be the day’s main market driver if contrary to market expectations of being relatively unchanged.
