11th November, 2014
Oil prices traded mixed Tuesday as the market gauged the outlook for an OPEC oil production cut amid abundant global supplies.
The benchmark US futures contract, West Texas Intermediate (WTI) for December, rose 54 cents to close at $77.94 a barrel on the New York Mercantile Exchange.
Brent North Sea for December shed 67 cents, settling at $81.67 a barrel in London, its lowest close since mid-October 2010.
Volumes were modest in New York as some traders were absent on the Veterans Day holiday.
Traders kept a close eye on OPEC members’ comments ahead of the cartel’s next meeting in Vienna on November 27, with dissent evident in the 12-nation group on the need for a production cutback.
“I hope that (oil) prices will not reach a level where they harm (the) national economy,” Kuwaiti Oil Minister Ali al-Omair told the official KUNA news agency on Tuesday. Oil income makes up around 94 percent of the country’s public revenues.
Omair attributed the slide in oil prices to oversupply and a weak global economy.
He said OPEC would discuss oil prices and “take appropriate decisions that serve the economic interests of its members” when they meet at the end of the month.
WTI had tumbled $1.25 in New York on Monday after he downplayed the likelihood of the 12-nation Organization of the Petroleum Exporting Countries cutting output.
A top Kuwaiti industry official said Tuesday that Kuwait plans more than $40 billion of investment to significantly increase its capacity to produce oil and gas
The Gulf nation aims to raise the amount of crude oil it can pump by one-quarter, to 4.0 million barrels per day, by 2020, the head of planning at state-owned Kuwait Oil Co., Mohammad Abduljalil, told the Al-Jarida newspaper.
OPEC, which pumps about a third of global crude, now produces nearly 31 million barrels per day, around one million barrels more than its official ceiling.
“Doubts regarding OPEC production policy continue to weigh on market sentiment with recent comments from OPEC officials providing little support,” said Tim Evans of Citi Futures.
The US Department of Energy’s closely watched weekly report on oil inventories, normally released on Wednesdays, will be published Thursday due to the Veterans Day holiday.