The Organization of the Petroleum Exporting Countries (Opec) has no plans to hold an emergency meeting amid falling oil prices, according to a delegate from the group.
Crude prices have dropped almost 50 percent from a June peak, as Opec refused to cut production and US output reached a three-decade high. There have been no concrete discussions about holding an emergency meeting, said the delegate, who asked not to be identified because the group’s talks are private. Opec’s next regular meeting is on June 5.
Brent for April settlement added 29 cents to $59.19 a barrel on the London-based ICE Futures Europe exchange at 1 p.m. Singapore time. Monday prices rebounded to gain 45 cents in intraday trading, after Opec President Diezani Alison-Madueke said in an interview with the Financial Times that she will call a meeting if prices keep declining.
“An emergency meeting would suggest that they are going to do something to support the market,” said Bill O’Grady, chief market strategist at Confluence Investment Management in Saint Louis, which oversees $2.4 billion. “If there is no emergency meeting, then there is no reason to get excited, and that’s really where we are now.”
Opec, which supplies about 40 percent of the world’s crude, pumped 30.9 million barrels a day in January, exceeding its target for an eighth straight month, according to production estimates compiled by Bloomberg.
The Energy Information Administration (EIA) forecast that US output will increase to 9.3 million barrels a day this year, the most since 1972. Crude stockpiles rose to 425.6 million barrels as of February 13, the most in EIA weekly data beginning 1982.
If the oil price “slips any further, it is highly likely that I will have to call an extraordinary meeting of Opec in the next six weeks or so,” Alison-Madueke said in the interview.
Oil traded below $50 a barrel before US government data, forecast to show crude inventories, expanded from a record high in the world’s biggest consumer.
Futures were little changed in New York, after falling 2.7 percent on Monday. Crude stockpiles probably rose by 3.75 million barrels last week, a Bloomberg News survey showed before an EIA report on Wednesday. Supplies have increased the prior six weeks to 425.6 million, the most in records dating back to August 1982. Opec, which pumps about 40 percent of the world’s oil, has no plans for an emergency meeting, according to a group delegate.
Oil slumped almost 50 percent last year as the Organization of Petroleum Exporting Countries signaled that it’s prepared to let prices drop to a level that would force US production to slow. Rigs targeting crude in the nation shrank to the fewest since July 2011 after drillers idled machines for an 11th week.
“Traders are wrestling with two key dynamics at the moment — the fact that supply is exceeding demand and that’s evidenced by growing US inventories against a presumption by some that supplies are going to moderate,” Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone.
West Texas Intermediate for April delivery was at $49.49 a barrel in electronic trading on the New York Mercantile Exchange, up 4 cents, at 3:33 p.m. Sydney time. The contract lost $1.36 to $49.45 on Monday. The volume of all futures traded was about 60 percent below the 100-day average. Futures have decreased 7.1 percent this year.
Brent for April settlement was 26 cents higher at $59.16 a barrel on the London-based ICE Futures Europe exchange. It slid $1.32 to $58.90 on Monday, the lowest close since February 12. The European benchmark crude traded at a premium of $9.63 to WTI.
US crude stockpiles have climbed almost 20 percent above the five-year average level for this time of the year, according to the EIA. Production surged to 9.28 million barrels a day through February 13, the most in weekly data compiled by the Energy Department’s statistical arm since January 1983.
Opec has had no concrete discussions about holding emergency discussions, the delegate said on Monday, asking not to be identified because the talks are private. The 12-member group last gathered Nov. 27 in Vienna and is scheduled to meet on June 5.
Opec pumped 30.9 million a day of oil in January, exceeding its target of 30 million for an eighth straight month, according to production estimates compiled by Bloomberg.