The price of OPEC basket of fourteen crudes stood at $46.64 a barrel on Monday, compared with $44.63 the previous Friday, according to OPEC Secretariat calculations.
The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Rabi Light (Gabon), Minas (Indonesia), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
Meanwhile, Reuters reports that oil prices fell on Tuesday on a rise in Iranian exports which add to a global supply overhang, although a planned OPEC-led production cut later this year offered some support.
International Brent crude oil futures LCOc1 were trading at $50.63 per barrel at 0645 GMT, down 26 cents, or 0.5 percent, from their previous close.
U.S. West Texas Intermediate (WTI) crude CLc1 was down 32 cents, or 0.66 percent, at $48.49 a barrel.
Traders said prices were dented by the latest rise in Iranian crude and condensate sales, which likely reached about 2.8 million barrels per day (bpd) in September, almost matching a 2011 peak in shipments before sanctions were imposed on the OPEC producer.
Analysts said Iran will struggle to boost output further and reaching pre-sanctions levels makes it more likely Tehran will agree on some form of production constraint with other members of the Organization of the Petroleum Exporting Countries (OPEC), including its regional rival Saudi Arabia, which is also pumping oil near record levels.
There was optimism that OPEC producers, and perhaps also exporters outside the club like Russia, would find some form of agreement by the time the group meets in November, although the risks of failure remain.
“For now, optimism has returned and the market will anxiously await any confirmation of the agreement or additional non-OPEC participation,” Morgan Stanley said in a note to clients.
Barclays said on Tuesday that it expects oil “prices will rise to the low $50 range in Q4.”
Yet so far, there are few signs of production cuts outside OPEC.
“Russian crude oil production continues to outperform… Russian oil production increased to 11.1 million bpd in September… As a result, we have revised up our 2016 crude and condensate forecast to 10.94 million bpd and 2017 forecast to 11 million bpd,” BMI Research said.
Morgan Stanley said that “the risk of disappointment (from a failed production deal) is high, and fundamentals remain challenging/unchanged in the interim”.
Despite Tuesday’s dips, the overall higher crude prices since August have hit profits in the refinery sector.
Asian benchmark Singapore refinery margins DUB-SIN-REF have fallen almost a third in the last five days to under $5 per barrel.
Beyond the higher crude feedstock prices, traders said that a seasonal downturn in product demand amid an ongoing fuel supply overhang was also weighing on refinery products.
Source: Opec/Reuters
