Oil prices toppled early on Monday, October 24, as Iraq said it wanted to be left out from any deal by the Organisation of Petroleum Exporting Countries, OPEC, to cut production to prop up the market, and as U.S. drillers stepped up work.
Brent crude futures LCOc1 were trading at $51.59 per barrel at 0133 GMT, down 19 cents, or 0.4 percent, from their last close. U.S. West Texas Intermediate (WTI) crude was down 22 cents, or 0.4 percent, at $50.63 a barrel, Reuters reports.
According to traders, the price falls followed comments from Iraq, which said it wanted to be exempt from a production cut by the cartel that the group plans to decide at its Nov. 30 meeting.
OPEC plans to reduce production to a range of 32.50 million to 33.0 million barrels per day (bpd), down from 33.39 million bpd in September.
That would be harder to achieve if Iraq, which is OPEC’s second-biggest producer after Saudi Arabia, didn’t participate.
Iraq said on Sunday that its oil production stood at 4.774 million bpd, with exports standing at 3.87 million bpd.
“We are not going back in any way, not by OPEC not by anybody else,” said Falah al-Amri, the head of Iraq’s State Oil Marketing Company.
“Comments by Iraq over the weekend that it may not join the OPEC agreement to cut production could see oil prices come under pressure in today’s session,” ANZ bank said on Monday.
Also pressuring the market, U.S. oil rigs rose by 11 last week, the first double-digit increase since August. [RIG/U]
“We should see rig counts continue to increase in the wake of the recent price rally,” Morgan Stanley said.
Ongoing strength in the dollar .DXY, which can crimp demand as it makes fuel purchases more expensive for countries using other currencies at home, also weighed on oil.