Oil fell from the highest price in more than a week amid specul-
ation about the effectiveness of OPECâ€™s supply curbs and forecasts for another expansion in US crude stockpiles.
Futures dropped 0.6 percent in London, ending three days of gains. The Organization of Petroleum Exporting Countries is confident members will continue to cut production and reduce global stockpiles, Secretary-General Mohammad Barkindo said. The group will need to extend the reductions beyond six months in order to really have an impact on high global stockpiles, said Total SA Chief Executive Officer Patrick Pouyanne. US crude inventories expanded last week, a Bloomberg survey showed.
A surge in US crude stockpiles to the highest level in more than three decades has kept oil futures in a tight range above $50 a barrel this year, offsetting the impact of supply cuts by OPEC and 11 other nations. The exporters group has implemented about 90 percent of the pledged reductions and will push for full compliance, although Barkindo said itâ€™s too early to say whether the production agreement could be extended beyond its initial six-month term.
â€œIf they want really to have an impact on the market, which means to have the inventories going down because inventories are quite high, it will have to be extended,â€ Pouyanne said in a Bloomberg television interview in New York. â€œIâ€™m convinced that they will do it.â€
Brent for April settlement fell 34 cents to $56.32 a barrel on the London-based ICE Futures Europe exchange at 11:12 a.m. The contract advanced 48 cents, or 0.9 percent, to $56.66 on Tuesday, the highest price since Feb. 10.
West Texas Intermediate for April delivery dropped 30 cents to $54.03 a barrel on the New York Mercantile Exchange. Total volume traded was about 9 percent below the 100-day average. The March contract expired Tuesday after advancing 66 cents to $54.06, the highest since Dec. 28. The US benchmark crude traded at a discount of $2.29 to global benchmark Brent.
The pace of the decline in global oil stockpiles, which OPEC wants to see fall back in line with the five-year average, will determine the groupâ€™s next move, according to Barkindo. Representatives of member countries are meeting in Vienna to discuss compliance with their November 30 supply accord.
The CEO of the French oil and gas company said heâ€™s â€œnot fully convincedâ€ that tough times for the industry are over. Factors including rising US shale oil production and increasing output from Libya may continue to have a negative impact on prices, Pouyanne said.
US stockpiles probably rose by 3.5 million barrels last week, according to analysts surveyed by Bloomberg before a government report Thursday. Nationwide inventories have increased by about 40 million barrels since the start of the year.
Rosneft PJSC, the state-run producer headed by a close adviser of Russian President Vladimir Putin, is expanding its footprint in the Middle East by striking new oil deals with Iraqâ€™s Kurdish region and Libya.
The company doubled quarterly profit after acquiring Russian oil producer Bashneft PJSC in a state asset sale. Oil industry cost cutting has reached â€œthe bone,â€ creating the risk of a price spike in two to three years, Qatarâ€™s Energy Minister Moham-
med Al Sada said at IP Week conference in London. ConocoPhillips said proved reserves of oil and natural gas tumbled 21 percent to a 15-year low as weak energy prices made some oil-sands assets in western Canada unprofitable.