Oil prices remain volatile as traders eye OPEC
Oil prices bounced in and out of the red on Tuesday as traders assessed the possibility that OPEC could consider production caps next month.
NEW YORK CITY— Oil prices bounced in and out of the red on Tuesday as traders assessed the possibility that OPEC could consider production caps next month, according to a report in the Wall Street Journal.
The president of OPEC said Monday that the 14-country producers’ group will hold an informal meeting Sept. 26-28 at the International Energy Forum in Algeria.
However, many analysts remain skeptical that the meeting will result in a unified response to low oil prices. A group of producing nations met in April to discuss freezing production, but the talks fell apart.
US crude oil for August delivery slipped 1 cent to $43.01/bbl on the New York Mercantile Exchange. Brent, the global benchmark, declined 11 cents, or 0.2%, to $45.28/bbl on ICE Futures Europe.
Oil prices sank in 2014 and 2015 as robust production in the US and elsewhere created a global glut of crude oil. The market remains oversupplied, but many analysts say that declining output in the US and robust demand are helping to soak up the excess.
OPEC members have pumped oil at full tilt in recent years, choosing to compete for market share rather than cutting output to push prices higher.
The announced talks next month “are likely to prove to be nothing but empty talk, with OPEC sticking with its policy of defending its market shares,” one analyst was quoted to say in the Wall Street Journal report.
But anticipation of the talks could keep prices from falling further. The call for a September OPEC meeting to freeze production is likely to send prices back within $42.50 to $45.50/bbl, some analysts projected.
Traders are also waiting on monthly supply-and-demand outlooks from the Energy Information Administration, the International Energy Agency and OPEC, all due this week.