Oil steadied following the biggest two-day gain since June as investors weigh whether OPEC and its allies will cut production in meetings in Vienna this week.
Futures in New York erased earlier losses of as much as 2.1 percent.
Saudi Energy Minister Khalid Al-Falih said it’s “ premature” to say whether the producer group will agree on efforts to stabilize the oversupplied market and walked back recent statements about the size of any supply reduction. Meanwhile, Libyan oil ports were said to be shut due to bad weather.
Crude breached $53 a barrel for the first time in almost two weeks after Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman agreed they would cooperate on managing the oil market.
But in talks between officials after that meeting, Saudi Arabia argued Russian proposals, which implied Moscow would cut output by a maximum of 150,000 barrels a day, would leave the kingdom shouldering too much of the burden.
“Oil prices have been under pressure again since yesterday,” Commerzbank AG analysts including Carsten Fritsch wrote in a report. “This was mainly due to Saudi Arabia’s Energy Minister Al-Falih, who fueled doubts that a production cut would be agreed at the OPEC meeting.”
West Texas Intermediate for January delivery dropped as much as $1.09 to $52.16 a barrel on the New York Mercantile Exchange, and was at $53.17 at 11:22 a.m. in London. Futures closed at $53.25, up 30 cents, on Tuesday. Total volume traded was about 47 percent above the 100-day average.
Brent for February settlement fell 16 cents to $61.92 a barrel on London’s ICE Futures Europe exchange, after rising 39 cents on Tuesday. The global benchmark crude was at an $8.52 premium to WTI for the same month.
In an interview with Bloomberg, Al-Falih said Moscow backs curbs “in principle,” but it’s too early to say what they will agree to. On the size of cuts, he said the group still needs to “figure out what needs to be done and by how much.” The comments were less definitive than those made last month, when he called for a reduction of 1 million barrels a day.
The world’s two top oil exporters will have another chance to hammer out a deal when Al-Falih and his Russian counterpart Alexander Novak attend the Joint Ministerial Monitoring Committee’s meeting in Vienna Wednesday, a day ahead of the full OPEC gathering on Dec 6. The panel oversees compliance with the 2016 output pact between OPEC and its partners.
In the U.S., the American Petroleum Institute was said to report nationwide crude stockpiles increased 3.57 million barrels last week. If confirmed by government data on Thursday, it will mark an 11th consecutive week of gains. Inventories for gasoline and diesel were also said to have risen.
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