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Oil Prices Gyrate as OPEC Heavyweights Head to Vienna

Oil Prices Gyrate as OPEC Heavyweights Head to ViennaOil Prices Gyrate as OPEC Heavyweights Head to Vienna

Oil prices edged higher on Monday, after falling as much as 2% in early trading, as the market grappled over the shaky prospect of major producers being able to agree output cuts at a meeting on Wednesday aimed at reining in global oversupply.

Brent crude fell as far as 2% before clawing back to trade 29 cents at $47.44 per barrel, Reuters reported.

US West Texas Intermediate crude also recouped early losses and was trading up 15 cents at $46.21 per barrel.

The choppy trading came after prices tumbled more than 3% on Friday as doubts grew over whether OPEC would reach agreement to help curb global supply overhang that has more than halved prices since 2014.

On Sunday, Saudi Arabian Energy Minister Khalid al-Falih said that he believed the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.

The statement added to simmering disagreement between OPEC and non-OPEC crude exporters such as Russia over who should cut production by how much.

Analysts said that even if some form of an output restriction is announced after producers meet in Vienna on Wednesday, the details matter greatly.

"Do not take an announcement of a headline cut of 1 million barrels per day at face value. It could still imply an OPEC production level considerably in excess of 33 million bpd, depending on developments in Libya and Nigeria and the speed and rigor of compliance," David Hufton, managing director of brokerage PVM Oil Associates Ltd. said in a note.

 

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