NEW YORK (DTN) -- New York Mercantile Exchange oil futures were mixed at the start of regular trade this morning as the prospect for an oil production cut by the Organization of Petroleum Exporting Countries weighed against a rallying dollar index.
Oil futures advanced overnight after Russia recommitted to freezing its output, joining OPEC in their plan to cut oil production next month. Russian Energy Minister Alexander Novak said an oil production freeze agreement was necessary to support prices, adding that he would seek to work out a deal with his Saudi Arabian counterpart Khalid al-Falih at a meeting this weekend. While a major oil producer, Russia is not a member of OPEC, although Russia often attends cartel meetings as an observer.
OPEC hopes to approve a Sept. 28 pledge by members to limit output to 32.5 to 33.0 million bpd when they meet on Nov. 30 in Vienna, but its 14 members are still negotiating details including their individual output quotas. Iran, Iraq, and Venezuela have complained that they are being given less in allowable output by the proposed OPEC quota plan. The Vienna summit could be characterized by rancorous discussions before a final deal is announced, said analysts.
At last look, NYMEX December West Texas Intermediate crude oil futures eased 17cts to $50.46 bbl. On Thursday, November WTI contract expired $1.17 lower at $50.43 bbl after rallying Wednesday to a 15-month spot high of $51.93. The December Brent futures contract on the IntercontinentalExchange was little changed, up a penny at $51.39 bbl. In products trade, NYMEX November ULSD futures edged up 0.56cts to $1.5652 gallon while the November RBOB futures contract nudged up 0.91cts to $1.5028 gallon.
Domestically, the Energy Information Administration said midweek that crude oil stocks unexpectedly fell 5.3 million bbl for the week-ended Oct. 14, with supplies at the Cushing supply hub in Oklahoma, down 1.6 million bbl to 59.7 million bbl. The World Bank has raised its price forecast for WTI crude futures in 2017 to $55 bbl range from $53 bbl on the planned OPEC production cut designed to rid the global market of excess supply. The bank kept its 2016 estimate at $43.
George Orwel can be reached at firstname.lastname@example.org
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