OIL headed for a second weekly advance as investors seek clues on whether OPEC will replace Iranian output, while the US president pressures the group to lower prices.
Futures were little changed in New York, on course for a weekly gain of 2.1%.
President Donald Trump tweeted on Thursday that OPEC “must get prices down now!” before the group heads to a contentious meeting in Algeria this weekend.
Prices rose earlier in the week after Saudi Arabia signaled Brent rising above US$80 a barrel may be unavoidable with the loss of Iranian supply as US-imposed sanctions on the Persian Gulf nation near.
Crude has gained over the past month on concerns over tightening supply as buyers shun imports from Iran.
Shipments from the Middle Eastern nation slumped to their lowest in two and a half years ahead of the US sanctions in November.
More immediately, the market is looking to the Opec’ September 23 meeting with allies for clarity on whether the group will boost production to counter potential shortages.
“I think OPEC will struggle to control prices,” said Daniel Hynes, a Sydney-based analyst at Australia and New Zealand Banking Group Ltd.
“They had high expectations of managing the risk earlier this year, however, the speed and magnitude of the losses in production has far exceeded their original expectations. It’s a geopolitical nightmare for investors”.
West Texas Intermediate for November delivery traded at US$70.22 a barrel on the New York Mercantile Exchange, down 10 cents, at 12:17pm in Seoul.
The October contract on Thursday fell 32 cents to US$70.80 before expiring.
Total volume traded was about 53 percent below the 100-day average.
Brent for November settlement was at US$78.73 a barrel on the ICE Futures Europe exchange.
The contract dropped 0.9% Thursday to US$78.70. The global benchmark traded at an US$8.52 premium to WTI for the same month.
Shanghai crude futures for December delivery were down 0.8% at 531.9 yuan a barrel, after gaining 1.4% on Thursday.
The contract is up 1.2% this week, on course for a second weekly advance.
Trump’s first attack on OPEC came on April 20, just hours after Saudi Arabian Oil Minister Khalid Al-Falih said the group would continue its production curbs. Within a month, the kingdom had performed a dramatic U-turn and by June, the cartel and its allies were promising to add 1 million barrels a day to the market.
In Algiers, OPEC and its partners are set to have another meeting where Iran has threatened to veto any decision made by the group that harms the Islamic Republic. Oil Minister Bijan Namdar Zanganeh said an OPEC committee has no authority to impose a new supply arrangement.
This also raises the risk of public disarray at the next OPEC meeting in Vienna in December.- Bloomberg L.P.