SINGAPORE: Oil prices dipped in Asia on Friday after Saudi Arabia’s oil minister cast doubt on the need to cut output, denting hopes for a deal at talks next month aimed at addressing a global supply glut.
The commodity rallied for seven straight sessions and entered a bull market – a 20 percent rise from recent lows – last week after OPEC and Russia announced plans to discuss the supply crisis, which has hammered the crude market for more than two years.
Prices have taken a beating this week on concerns about the chances of success at the Algeria meeting, but they turned higher on Thursday when Iran said it would join in, clearing up days of uncertainty over its attendance.
However, OPEC kingpin Saudi Arabia’s energy minister Khalid Al-Falih revived worries about the success of the gathering.
In an interview, he told Bloomberg News: “I don’t believe that an intervention of significance is required. I certainly don’t advocate a cut.”
But he added that a “freeze signifies that everybody is content with where the market is today and they want it to be trending in that direction”.
At about 0410 GMT, the US benchmark West Texas Intermediate for October delivery was down seven cents at $47.26, while North Sea Brent was down 11 cents at $49.56.
A previous OPEC attempt to freeze output collapsed in April largely because of Iran’s refusal to join talks, having just emerged from international sanctions and keen to maximise its oil revenues.
However, even if a deal is reached in Algeria, there are doubts about the impact a production cap have on an already oversupplied market.
“Most of the OPEC countries are sending a signal that they’re open to freezing production, but you have to remember that most of them are producing at peak levels,” BMI Research oil and gas analyst Peter Lee told