[NEW YORK] Oil fell below US$50 a barrel after Russia cast doubt over a deal any time soon with Opec, following the group's pledge to reduce production.
Futures slipped 1.3 per cent in New York after closing above US$50 for the first time since June on Thursday. Opec agreed in Algiers last week to cut output in a bid to shrink the world's crude glut and boost prices.
Russia's Energy Minister Alexander Novak said Friday he doesn't expect to sign a deal with Opec during the World Energy Congress next week in Istanbul. Price declines accelerated earlier when the US dollar hit the highest level in more than two months, reducing the appeal of commodities, before reversing the gains.
"Prices fell after Russia quashed hopes that a deal would be sealed in Istanbul," said John Kilduff, a partner at Again Capital LLC, a New York hedge fund focused on energy. "The dollar's strength is also weighing on the market."
Oil has gained about 13 per cent since the Organization of Petroleum Exporting Countries agreed Sept 28 to cut production for the first time in eight years. Opec, which pumped at a record in September, will decide on quotas at an official meeting of the group in Vienna on Nov 30. Hurricane Matthew is within miles of the Florida coast and may disrupt East Coast fuel shipments.
West Texas Intermediate for November delivery slipped 63 US cents to close at US$49.81 a barrel on the New York Mercantile Exchange, after touching US$50.74 in early trading. Total volume traded was 22 per cent above the 100-day average. Prices climbed 3.3 per cent this week.
Brent for December settlement fell 58 US cents, or 1.1 per cent, to US$51.93 a barrel on the London-based ICE Futures Europe exchange. Prices climbed to US$52.84 earlier. The global benchmark crude closed at a US$1.55 premium to WTI for the same month.
The bilateral meetings Mr Novak will hold with Opec ministers in Istanbul will be an "important step toward reaching an agreement on capping oil production," his ministry said later in a statement.
Russia sees the possibility of a deal being reached by the time the group meets in Vienna, according to the ministry.
"Talks, talks, and talks - that has been the baseline over the last week or so," said Tamas Varga, an analyst at PVM Oil Associates Ltd in London. "There's no practical indication that Opec will finally agree, meaningfully and credibly, to cut production at the end of the November meeting."
US crude inventories dropped by 2.98 million barrels to 499.7 million barrels, the Energy Information Administration reported Wednesday. The number of oil rigs operating in the country climbed to the highest since February this week, rising by 3 to 428, according to Baker Hughes Inc.
Eighteen of 32, or 56 per cent, of analysts, traders and brokers surveyed by Bloomberg Thursday were bearish on WTI. That's up from 50 per cent of respondents a week earlier. Eight of the respondents were bullish on the futures, while six were neutral.
Saudi Arabian Oil Co, the world's biggest oil company, is planning to sell shares in the entire business and not just in its refining or distribution operations, chief executive officer Amin Nasser said in an interview.
Igor Sechin, a long-time ally of Russian President Vladimir Putin, won an internal Kremlin struggle to buy the government's share in a regional oil producer, allowing his company Rosneft PJSC to continue expanding.
An Opec committee is moving ahead with implementing the Algiers agreement, secretary general Mohammed Barkindo said in a speech in Washington Thursday.