Oil prices edge lower on
doubts over production cut deal
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[October 28, 2016]
By Karolin Schaps
LONDON
(Reuters) - Oil prices edged lower on Friday and were set for the
biggest weekly losses in six weeks over doubts about whether oil
producers will be able to agree on an output cut big enough to curb a
global glut that has weighed on markets for two years.
Experts from the Organization of the Petroleum Exporting Countries and
counterparts from other oil-producing nations such as Russia started
two-day negotiations on Friday over an output-capping agreement expected
to be presented at the end of next month.
Disagreements remain over which members should be exempt from a curb to
reduce output to a range of 32.5-33 million barrels per day (bpd),
underscoring how difficult it will be for participants to reach a deal.
Brent crude futures <LCOc1> were down 35 cents at $50.12 a barrel at
0801 ET. The contract was set to close the week more than 3 percent
lower in its steepest weekly loss since mid-September.
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U.S. West Texas Intermediate (WTI) <CLc1> crude was down 46 cents at
$49.26 a barrel, also on track for its biggest weekly loss in six weeks.
"Doubts linger about OPEC's ability or willingness to implement any
production cuts," said analysts at Cenkos Natural Resources.
"The market has been wary of reading too much into the rhetoric ahead of
the next meeting scheduled for the end of November."
Analysts at Commerzbank said the success of an output deal will depend
on whether Gulf producers Saudi Arabia, the United Arab Emirates, Kuwait
and Qatar are willing to implement the production cuts on their own if
no agreement can be reached with other producers.
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![](../images/102816pics/busine36.jpg)
Workers adjust the valves of an oil pipe as smoke rises from burning
excess gas (in the background) in Zubair oilfield in Basra, 420 km
(260 miles) southeast of Baghdad May 23, 2011. REUTERS/Atef Hassan
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French
oil major Total said on Friday it expected crude prices to remain volatile and
continued to reduce costs.
The French company said it loses around 2 billion euros in cashflow for every
$10 downward move in oil prices.
Weak prices have also hit Italian oil firm ENI, which reported a
worse-than-expected quarterly loss on Friday.
(Additional reporting by Henning Gloystein in Singapore; editing by Jason Neely)
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