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Oil heads for biggest monthly gain since April before Opec talks
[HONG KONG] Oil is poised for the biggest monthly advance since April amid speculation informal talks among Opec members in Algeria next month may result in action to stabilise the market.
Futures slid 0.3 per cent in New York, trimming the monthly gain to 11 per cent. Iraq would support a proposal for the Organization of Petroleum Exporting Countries and other major producers to freeze output, Prime Minister Haidar Al-Abadi said in Baghdad.
US crude stockpiles increased by 942,000 barrels last week, the industry-funded American Petroleum Institute was said to report. Government data due Wednesday is forecast to show a 1.3 million build.
Oil entered a bull market Aug 18, less than three weeks after tumbling into a bear market. A cap on production would be positive for the market, Saudi Arabia's Energy Minister Khalid Al-Falih said in an interview last week, while ruling out a cut to output. A deal to freeze supply was proposed in February but a meeting in April ended with no final accord.
"A freeze based on current maximum production levels, or somewhere near that, may not have too much practical impact on the market," said Ric Spooner, chief analyst at CMC Markets in Sydney.
"We are moving into the maintenance season for refineries and we could see some inventory builds starting to happen. There is the possibility that prices could drift lower."
West Texas Intermediate for October delivery was at US$46.22 a barrel on the New York Mercantile Exchange, down 13 US cents, at 8:02 am in Hong Kong. The contract declined 63 US cents to settle at US$46.35 a barrel on Tuesday. Total volume traded was about 1 per cent above the 100-day average.
Brent for October settlement, which expires Wednesday, was 10 US cents lower at US$48.27 a barrel on the London-based ICE Futures Europe exchange. Prices dropped 1.8 per cent to US$48.37 on Tuesday.
The global benchmark was at a US$2.10 premium to WTI. The more-active November contract slid 7 US cents to US$48.66.