Oil prices rise from
one-month lows after OPEC approves strategy
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[November 01, 2016]
By Aaron Sheldrick
(Reuters) - Oil prices rose from one-month lows in Asian trading on
Tuesday after OPEC agreed on a long-term strategy that was seen as an
indication the cartel was reaching a consensus on managing production.
But further gains are likely to be 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.
U.S. West Texas Intermediate (WTI) futures were up 23 cents at $47.09 a
barrel at 0725 GMT. They plunged nearly 4 percent to $46.86 a barrel in
the previous session.
Brent for January delivery, the new front-month contract, was up 45
cents at $49.06 a barrel. The previous front-month contract fell nearly
3 percent before expiry on Monday.
"After such a dramatic price drop ... this could be a bit of a technical
correction. I'm still bearish on oil in the sense that the OPEC deal
won't be realized," said Jonathan Chan, oil analyst at Phillip Futures
Oil prices had risen as much as 13 percent since the Organization of the
Petroleum Exporting Countries (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.
Still, OPEC approved a document on Monday outlining its long-term
strategy that would mean returning to its role of managing the market
and being more proactive in anticipating market changes.
That was a more bullish signal after OPEC representatives met on Friday
in Vienna, and then again on Saturday with their counterparts from
non-member producers, but failed to reach any specific terms, and
sources said Iran has been reluctant to even freeze output.
"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.
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A view of an oil refinery off the coast of Singapore, March 14,
2008. REUTERS/Vivek Prakash/File Photo
Kazakhstan has no plans to reduce oil output despite attending the
meetings of OPEC and non-OPEC producers, Kazakh Energy Minister Kanat
Bozumbayev said on Tuesday.
Bozumbayev told reporters the giant Kashagan field, where global majors
are about to begin commercial output, would be the main driver of output
growth and limiting Kashagan's production would not be possible.
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
(Reporting by Aaron Sheldrick; Editing by Michael Perry and Christian
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