Oil Prices Dip

Global oil prices slipped on Tuesday as crude output rose in most major export regions despite plans by OPEC and Russia to cut production, triggering fears the fuel glut that has dogged markets for over two years might last well into 2017.

International Brent crude oil futures traded at $54.83 per barrel, down 11 cents from Monday’s close. US West Texas Intermediate crude was at $51.50 a barrel, down 29 cents, Reuters reported. Traders and analysts said the boon from last week’s OPEC decision, which helped boost prices by about 15%, has faded and the organization’s promise had been undermined by data showing rising production from its members and Russia.

“Most of the position adjustments that the OPEC decision forced upon traders have now run their course and it leaves the market exposed to profit taking,” said Ole Hansen, head of commodities strategy at Saxo Bank.

“The meeting on Saturday between OPEC and non-OPEC producers will be crucial in order to maintain the bullish sentiment seen since last Wednesday,” Hansen said.

Market watchers had said OPEC’s decision to cut output marked an about-turn for Saudi Arabia, which has been battling to keep its market share for the past two years by selling more, if cheaper, barrels rather than bolstering prices.

But in a sign the fight for market share is not over, Saudi Aramco cut the January price for its Arab Light grade for Asian customers by $1.20 a barrel from December.