Oil prices inched higher from one-month lows in early trading in Asia on Tuesday, November 1, after the Organisation of Petroleum Exporting Countries, OPEC agreed on a long-term strategy that was seen as an indication the cartel was reaching a consensus on managing production.
However, the gains were limited as the market was weighed down by further indications of record output from the group, a sign the glut that has kept a lid on prices is not draining away as fast as the oil bulls would like, Reuters reports.
Brent for January delivery, the new front-month contract, was up 29 cents at $48.90 a barrel. The previous front-month contract fell nearly 3 percent before expiry on Monday.
U.S. West Texas Intermediate (WTI) futures were up 10 cents at $46.96 a barrel at 0456 GMT. They plunged nearly 4 percent to $46.86 a barrel in the previous session.
The cartel approved a document on Monday, October 31, outlining its long-term strategy that would mean returning to its role managing the market and being more proactive in anticipating market changes.
But the oil grouping had setbacks earlier, raising questions over their ability to control prices that have knocked their economies hard.
Representatives met on Friday in Vienna, and then again on Saturday with their counterparts from non-member producers. They did not reach any specific terms, and sources said Iran has been reluctant to even freeze output.
Oil prices had risen as much as 13 percent since OPEC announced on Sept. 27 a production cut to support prices after the slump that began in mid-2014. The cartel said members’ cuts will be finalised at a meeting later this month.
“The lack of progress on implementing production quotas and the growing discord between OPEC producers suggests a declining probability of reaching a deal on November 30,” Goldman Sachs said in a research note.
OPEC’s oil output likely hit a record high in October, rising to 33.82 million barrels per day as Nigeria and Libya partially resumed output after disruptions and Iraq raised overseas sales, according to a Reuters survey.
