19 November 2014 – Brent crude held steady below $79 a barrel on Wednesday as data showed Saudi Arabia increased crude exports in September despite signs of an oversupplied market and divisions between Opec members seemed to grow ahead of a meeting next week.
All eyes are on Opec’s response to a drop in oil prices of nearly one-third in recent months, with some smaller members calling for production cuts at the 27 November meeting in Vienna.
“It’s going to be hard to reach any sort of agreement to cut production,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“I don’t think the market believes it, and even if Opec does come out with a statement saying they’re going to cut, I think it’ll be met with a lot of scepticism,” he said.
Brent was 3 cents higher at $78.50 a barrel early on Wednesday, after settling 84 cents lower in the previous session.
US crude was down 31 cents at $74.30 a barrel. The contract closed $1.03 lower on Tuesday.
Diplomatic and market sources say Saudi Arabian officials told recent private briefings that the kingdom could live for some time with current, or even lower, levels.
The Opec heavyweight raised crude exports in September by about 59,000 barrels per day, while volumes used by domestic refineries remained high, official data showed.
A delegate from one of Opec’s smaller producers, who declined to be named, said the group needed to cut its output by up to 1 million bpd at the meeting next week.
US crude futures fell as data from the American Petroleum Institute (API) showed crude stockpiles rose 3.7 million barrels in the week ending 14 November, including a 1.4-million-barrel build at the Cushing oil hub.
The more closely watched report from the US Department of Energy’s Energy Information Administration (EIA) is due later on Wednesday. A Reuters poll of seven analysts forecast crude stocks fell 800,000 barrels last week.
An unseasonably cold blast of weather in the US could boost demand for heating oil, with temperatures in all 50 states dipping to freezing or below on Tuesday.