By Sarah McFarlane and Biman Mukherji

Oil futures edged lower Friday with volatility expected ahead of a meeting later this month of major oil producing countries aiming to strike a deal to cut output and stabilize prices.

Brent crude, the global oil benchmark, fell 0.6% to $46.23 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.9% at $45.02 a barrel.

Members of the Organization of the Petroleum Exporting Countries, which controls over a third of the world's oil, are scheduled to meet Nov. 30 to try to agree on output quotas, although it is likely to be a challenging task, with some requesting exemptions.

The market is particularly sensitive to statements coming out of Doha this week, where ongoing talks between OPEC members on the sidelines of a gas forum were expected to give some indication of progress toward a deal to cut oil production to between 32.5 million and 33 million barrels a day, from record levels around 33.83 million barrels a day in October.

Saudi Energy Minister Khalid al-Falih told Saudi-owned Al Arabiya television on Thursday that he is "optimistic" that OPEC's members will formalize the tentative deal they reached in September and set production limits for individual countries.

But observers are skeptical about a quick outcome.

"There is a lot of uncertainty on OPEC's ability to reach an outcome," said Peter Lee, Asia oil and gas analyst at BMI Research. "I am personally not optimistic."

The impact of any agreement between OPEC members to lower production could also be offset by surging output from non-OPEC producers, such as Russia, where production hit a post-Soviet high of 11.2 million barrels a day in October.

"Russia has earlier spoken with mixed voices regarding joining OPEC in an output cut or freeze," said Michael Poulsen, oil risk manager at Global Risk Manager.

Oil markets were also under pressure from a strengthening U.S. dollar after comments from Federal Reserve Chairwoman Janet Yellen raised expectations that the central bank will raise interest rates next month. A stronger dollar makes oil more expensive in other currencies.

The WSJ Dollar Index was up 0.3% on Friday against a basket of currencies, having advanced for nine consecutive trading days, its longest winning run since 2009.

Nymex reformulated gasoline blendstock--the benchmark gasoline contract--fell 0.5% to $1.34 a gallon. ICE gasoil changed hands at $423.50 a metric ton, unchanged from the previous settlement.

Write to Sarah McFarlane at

(END) Dow Jones Newswires

November 18, 2016 06:03 ET (11:03 GMT)

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