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Oil holds below US$45 as Saudi-Iran impasse dims supply deal hopes

Monday, September 26, 2016 - 07:33

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Oil traded below US$45 a barrel after the biggest drop in more than two months as an impasse between Saudi Arabia and Iran on managing supply dims the prospect of a deal this week among major producers to stabilise the market.

[SYDNEY] Oil traded below US$45 a barrel after the biggest drop in more than two months as an impasse between Saudi Arabia and Iran on managing supply dims the prospect of a deal this week among major producers to stabilise the market.

Futures rose 0.7 per cent in New York after losing 4 per cent on Friday. Saudi Arabia doesn't anticipate any decision about supply when Opec members meet Wednesday in Algiers, according to an Opec delegate familiar with the country's policy.

The kingdom didn't reach an agreement with Iran after two days of talks in Vienna, which included a Saudi offer to cut output if Iran caps production, according to two people familiar with the negotiations.

Oil has fluctuated since rallying in August on speculation the Organization of Petroleum Exporting Countries and Russia will agree on ways to stabilise the market.

Chances that a deal this week will include Russia have slimmed as its delegation plans to join discussions only after Opec members reach a consensus among themselves, said three people with knowledge of the matter.

West Texas Intermediate for November delivery rose 32 US cents to US$44.80 a barrel on the New York Mercantile Exchange as of 8:43am Sydney time.

The contract lost US$1.84 to US$44.48 a barrel on Friday, the biggest decline since July 13. Total volume traded was about 46 per cent below the 100-day average.

Brent for November settlement added 31 US cents, or 0.7 per cent, to US$46.20 a barrel on the London-based ICE Futures Europe exchange.

Prices dropped US$1.76, or 3.7 per cent, to US$45.89 a barrel on Friday. The global benchmark traded at a US$1.43 premium to WTI.

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