Global benchmark Brent crude fell almost 1 per cent on Tuesday as hopes waned for an agreement between two of the biggest oil producers to freeze output to tackle a global supply glut.
Brent had jumped 5 per cent on Monday, after Saudi Arabia and Russia agreed to co-operate in world oil markets. But Brent pared gains later that session after Saudi energy minister Khalid al-Falih said there was no need to freeze output for now.
Freeze output
Still, his Russian counterpart Alexander Novak said he was open to ideas on what cut-off period to use if countries chose to freeze output, and said even production cuts could be considered.
On Tuesday, Brent futures for November delivery fell 37 cents, or 0.8 per cent, to settle at $47.26 a barrel. US crude, meanwhile, rose 39 cents, or 0.9 per cent from Friday’s settlement, to $44.83 per barrel. US crude did not settle on Monday due to the Labor Day holiday.
Labor Day
US trading was thin following the long Labor Day holiday weekend. Traders said US crude was supported by Genscape data showing a draw of some 700,000 barrels last week at the Cushing, Oklahoma, delivery hub for US crude futures.
The Organization of the Petroleum Exporting Countries and non-OPEC producers such as Russia will hold informal talks in Algeria on September 26th-28th. Many in the market are skeptical a deal will happen.
“The reaction so far suggests that talk is no longer enough to support prices; the market needs to see action,” Tim Evans, energy futures specialist at Citi Futures, said in a note.
(Reuters)
