Oil prices fall as investors look to next week’s Opec meeting
Oil prices fell overnight, ending two days of strong gains, as investors turned their attention to next week's meeting of the world's biggest oil producers.
Brent crude, the global benchmark, fell as much as 0.99 per cent to $47.18 per barrel as traders took on a cautious attitude ahead of a gathering of oil producers in Algeria next week to discuss a possible output freeze.
Its US counterpart, West Texas Intermediate crude, also fell 1.36 per cent to $45.69.
Traders told Reuters that the downward pressure was largely due to technical indicators and also selling pressure following strong price gains in the previous two trading sessions.
Another reason could be an increase in crude supplies after war-torn Libya exporter oil from its Ras Lanuf port for the first time since at least 2014. It had been shuttered due to a civil war which was roughly split the country between East and West.
While analysts sceptical that Organisation of Petroleum Exporting Countries (Opec) and non-Opec producers will agree production freeze deal, they think these talks will be more conciliatory than a previous attempt in April which collapsed amid infighting.
ANZ bank said today that it did not expect a formal deal, but added that "discussions between Saudi Arabia and Iran this week suggest they are keen to get something done…, which raises the possibility of a sharp reaction to the upside in prices if an agreement is reached."
US investment bank Jefferies said that "rhetoric into the event seems to be shifting towards agreements to continue talking with action potentially coming later on (at) the next formal OPEC meeting in Vienna" in November.
