SINGAPORE- Oil prices were mixed in Asia Wednesday as dealers predicted that leading producer Saudi Arabia will resist pressure from other OPEC members to cut output in a bid to prop up falling prices.
US benchmark West Texas Intermediate for December delivery fell 20 cents to $74.41 while Brent crude for January rose 10 cents to $78.57 in late-morning trade.
“The focus at the moment is on Saudi Arabia and whether it will succumb to pressure from within the OPEC cartel and outside to cut production,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP.
“The indications so far are that the Saudis are unlikely to budge on their current position,” he said.
Despite a drop of more than 25 percent in prices since June, the 12-nation Organization of the Petroleum Exporting Countries has been divided on whether to reduce output and prevent further falls. Venezuela and Ecuador have called publicly for a cut, while Iran has hinted at a need to reduce output as oil producing countries see their incomes slide.
But Saudi Arabia, OPEC’s de facto leader and the world’s top producer, has been resisting calls for an output reduction, moving instead to slash prices on crude exports to maintain market share. OPEC pumps about a third of global crude and is currently producing just under 31 million barrels per day, around one million more than its ceiling.
It will next discuss production targets in a meeting in Vienna on November 27.
Venezuela’s President Nicolas Maduro said Monday the country’s Foreign Minister Rafael Ramirez was touring oil-producing countries encouraging their governments to take action to increase prices.
His tour includes Algeria, Qatar, Iran and non-OPEC member Russia. Maduro added in the televised address that Venezuela will coordinate a special meeting of OPEC and non-OPEC countries “to take decisions in defense of oil and oil prices”.
McCarthy said dealers will be scrutinising the latest US stockpiles report to be released later Wednesday for an idea of the state of demand in the world’s top crude consumer.