Oil slips further as Iran nuclear talks set to resume

imageCommodities1 hour ago (Nov 04, 2021 16:00)

© Reuters. FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford

By Stephanie Kelly

NEW YORK (Reuters) -Oil prices fell on Thursday, reversing earlier gains in a volatile session after a report that Saudi Arabia’s oil output will soon surpass 10 million barrels per day for the first time since the outset of the coronavirus pandemic.

The report, from Saudi-owned Al Arabiya TV, came after the nation, along with other Organization of the Petroleum Exporting Countries and its allies, agreed to stick to previously agreed-upon production increases.

Brent crude fell 29 cents to $81.70 a barrel by 11:29 a.m. EDT (1529 GMT). Earlier, Brent rose to $84.49 a barrel. U.S. West Texas Intermediate crude fell 77 cents to $80.09 a barrel, well off the session high of $83.42.

The Organization of the Petroleum Exporting Countries and allies, collectively known as OPEC+, agreed to stick to plans to raise oil output by 400,000 barrels per day (bpd) on a monthly basis, sources said, despite calls from the United States for extra supply to cool rising prices.

Saudi Arabia has already dismissed calls for speedier oil supply increases from OPEC+. But the Al Arabiya TV report said the Saudis will reach 10 million bpd in December.

“Saudi Arabia is trying to massage the message to cool any backlash,” said Phil Flynn, analyst at Price Futures Group in Chicago. “Oil prices came up in anticipation of OPEC following through on their commitment and now they’re pulling back. You see some nervous trading.”

Top producers Saudi Arabia and Russia are confident higher oil prices will not elicit a fast response from the U.S. shale industry, OPEC+ sources said. U.S. companies have pledged to preserve capital and prioritize investor returns.

Still, several large oil companies plan to increase output or shale spending next year.

Iran and six global powers agreed to resume talks on Nov. 29 to revive the 2015 deal on Iran’s nuclear program. Iran has demanded that Washington drop sanctions that have limited its exports.

On Wednesday both benchmarks posted their biggest daily percentage declines since early August after weekly U.S. inventory data showed a larger-than-expected rise in crude stocks last week. [EIA/S]

Oil prices fall, reverse gains as Saudi TV reports looming output rise

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