Oil price set for volatile sessions ahead of Algeria meeting

By Azernews

By Nigar Abbasova

World oil prices have recorded a growth amid output suspensions in the U.S. Gulf due to expected weather deterioration and speculation that the upcoming Algeria meeting will be a turning point for reaching a supply and demand balance in the "black gold" market.

Brent crude futures were 47 cents up from the previous close at $49.73 on August 30. U.S. West Texas Intermediate (WTI) crude was up 45 cents at $47.43 per barrel, CNBC reported.

Oil and gas operators in the U.S. Gulf of Mexico have shut output equal to 168,334 barrels per day (bpd) of oil and 190 million cubic feet per day of natural gas as a precaution against a tropical storm, the U.S. Bureau of Safety and Environmental Enforcement said on Monday.

The rise was also triggered by speculation that producers’ meeting in Algeria next month will support the prices. "Prices are still finding support from the expectations of an agreement on production caps being reached at the late-September meeting," Commerzbank said in a note, Reuters reported.

Nevertheless, most of analysts say that disagreements within the Organization of the Petroleum Exporting Countries (OPEC), and especially its key members -- Saudi Arabia and Iran, undermine expectations of any positive impact on global output from the upcoming talks.

“There’s a lot of price uncertainty,” Robert Boslego, managing director of Boslego Risk Services in Santa Barbara, Calif, told the WST. “Oil inventories keep reaching new highs,” he said, adding that the big question whether OPEC members will intervene “if prices go back down to $40.”

Moreover, pessimistic expectations on the possible output freeze even strengthened after Iraq’s new Oil Minister Jabbar Al-Luaibi asked the multinational corporations extracting oil on Iraqi lands to increase output.

Iraq, which exported more crude this month from its southern ports than in July - will continue ramping up output.