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Oil pares losses on report of likely Opec output cap deal

[NEW YORK] Oil prices were down slightly on Wednesday, paring sharp early losses after Opec sources said the group was likely to consider a new output ceiling at its forthcoming meeting, although many in the market still appeared skeptical about such a deal.

Brent crude futures were down 35 cents, or 0.7 per cent, at US$49.54 per barrel by 11:29 am EDT (1529 GMT), after striking an intraday low at US$48.65.

US crude's West Texas Intermediate (WTI) futures showed a 40 cent decline at US$48.70, after plumbing to US$47.75 earlier.

Reuters cited four Opec sources as saying the Organization of the Petroleum Exporting Countries was likely to consider a production cap at its Thursday meeting.

An earlier report on Wednesday said Gulf OPEC members, including Saudi Arabia, were considering reviving the idea of coordinated oil output action by major producers, a senior Opec source said.

Market participants have doubted such a deal was likely. Iran, a key Opec member, has said it was determined to restore its crude exports to pre-sanction levels. Analysts had said the meeting on Thursday was likely focus on defending market share of individual Opec members.

REUTERS