Brent Dips Lower Ahead Of OPEC
Brent crude oil fell lower on Wednesday with just 24 hours until OPEC was set to meet to discuss whether or not to make a production cut. The commodity traded at $78.38 at 6:00 GMT as investors speculated that the cartel would end up doing nothing.
Ahead of Thursday’s meeting, OPEC nations’ oil ministers have been meeting to discuss whether a supply cut would be beneficial, but the talks have revealed a division between members that could stop the cartel from acting cohesively. Reuters reported that Saudi Arabian Oil Minister Ali al-Nami met with his counterparts in Venezuela, Russia and Mexico, but that they were unable to agree on a path forward.
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Most believe that Saudi officials are looking to accept the current prices and allow the market to correct itself. However, other nations within the cartel are calling for a production cut in order to boost prices back near $100, the figure needed to balance their budgets. Analysts see Brent prices continuing their tumble if no cut is made, with some forecasting prices as low as $60 per barrel.
Meanwhile, the slowdown in Asia and Europe is also weighing on Brent prices as the two nations’ crude appetites have been declining alongside their economies. GDP estimates out on Tuesday painted a worrying picture for India as the analysts saw the nation’s growth slowing to 5 percent in the third quarter, down from 5.7 percent in the second quarter. Worries about India added to growing concern about the entire region after Japan’s GDP figures showed the nation had fallen into recession and the People’s Bank of China surprised markets with an interest rate cut.
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