The price of OPEC basket of fourteen crudes stood at $43.27 a barrel on Thursday, compared with $42.54 the previous day, 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, MarketWatch reports that oil prices fell in early Asia trade Friday on bargain-hunting following two days of strong gains as market approaches next week’s meeting of major oil producers with caution and skepticism.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in November CLX6, -1.32% traded at $45.79 a barrel, down $0.53, or 1.1%, in the Globex electronic session. November Brent crude LCOX6, -0.97% on London’s ICE Futures exchange fell $0.44, or 1%, to $47.26 a barrel.
“Without a major catalyst, prices will remain in a narrow range,” said Gao Jian, an energy analyst at SCI International, adding that the latest price drop was a result of technical selling.
Skepticism over next week’s meeting of the Organization of the Petroleum Exporting Countries is also weighing on sentiment. The general view is that OPEC heavyweights, such as Saudi Arabia, Iran and Iraq, will not be able to forge a consensus to either slash or freeze production due to their longstanding political rivalry and emphasis to expand market share over prices.
Some analysts, however, believe that a non-action, despite hurting prices, is probably the best solution as lower prices in the long run will drive out high-cost producers, in particular some shale producers in the U.S.
“This way, price goes down, shale dies and the market rebalances faster,” said Mohab Kamel, a trader at Geneva-based Magma Oil.
There has been a raft of rhetoric from major OPEC producers since the meeting was called in late August, which has lifted prices. Saudi Arabia and Russia earlier this month inked an oil-cooperation agreement. OPEC oil chief Mohammed Barkindo last weekend said that if agreed by all parties, an emergency meeting could be called later this year to solidify a policy. Venezuelan President Nicolas Maduro has also said OPEC and non-OPEC members were close to a deal.
“The question is, how much of the rhetoric is real and how much of is just wishful thinking by some countries,” said a Chinese fuel-oil trader in Singapore.
A senior OPEC official was quoted by the Wall Street Journal as saying that OPEC has to keep the chatter going, “to make sure prices don’t fall to a certain level or rise to a certain level they don’t like, and recently we have seen a lot of that.”
Nymex reformulated gasoline blendstock for October — RBX6, -1.60% the benchmark gasoline contract — fell 212 points to $1.3806 a gallon, while October diesel traded at $1.4451, 91 points lower.
ICE gasoil for October changed hands at $424.75 a metric ton, down $2.75 from Thursday’s settlement.
Source: Opec / MarketWatch
