By Sarah McFarlane and Dan Strumpf
Oil futures were slightly lower on Thursday, with all eyes on the coming Organization of the Petroleum Exporting Countries meeting next week, where a deal to cut output is expected.
Brent crude, the global oil benchmark, was down 0.10% to $48.90 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading 0.06% lower at $47.92 a barrel.
Headlines on OPEC have been the dominant factor driving price moves in the oil market for much of this year. Prices have rebounded in recent weeks in anticipation that the cartel will follow through with a production cut at its Vienna meeting on Nov. 30, though some sticking points remain around the terms of a cut for members such as Iran and Iraq.
"With a steady flow of supportive statements, member countries have raised the stakes and put themselves in a position where something needs be delivered," consultancy JBC Energy said in a research note, adding that a deal remains complex due to economic challenges in member states and geopolitical issues.
Most analysts expect a swift fall in oil prices if OPEC fails to reach a deal.
"The consequence of no deal will be well known to all, and one that none can afford, even the Saudis," said Wellington, New Zealand based Stuart Ive, private client manager at OM Financial.
According to calculations by Commerzbank, Saudi Arabia requires an oil price of $74 per barrel if it is to halt the decline in its currency reserves.
"Many OPEC members attempted to offset their revenue losses by expanding output, but in doing so simplyincreased the oversupply," said Commerzbank in a research note.
Data on Wednesday showed that U.S. weekly crude stocks fell by 1.3 million barrels, surprising many analysts who had expected stocks to grow.
However, the number of rigs drilling for oil rose by three in the past week to 474, according to services company Baker Hughes Inc. The rig count has been rising since the beginning of summer, after U.S. oil prices recovered to above $50 a barrel, having dipped to around $26 in February.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--rose 0.3% to $1.43 a gallon. ICE gasoil changed hands at $444.00 a metric ton, down $1.75 from the previous settlement.
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(END) Dow Jones Newswires
November 24, 2016 06:01 ET (11:01 GMT)
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