Oil prices slipped again Thursday. The pace of the fall has eased a little, however, as investors take a breath and weigh up recent, relevant developments.
After rising for over a week, Energy International Agency (EIA) data and worries over the extension of the existing OPEC output cap, weighed on investor enthusiasm during the past few days. However, OPEC data showing a drop in Iraqi oil exports during October helped slow the pace of decline.
By 1330 BST, the price of Brent crude was 0.7% lower at $61.4 per barrel. WTI oil, meanwhile, was down 0.4% at 55.11.
EIA data leads
The latest EIA data reported an increase in US oil stockpiles. Some 1.85 additional barrels of oil were reported for the week ended November 9. That was in contrast to expectations for a decline.
When more oil is available, the price of it tends to fall, unless demand for the precious energy commodity significantly increases, too.
That rise in US stocks was significant. However, news from OPEC that slower Iraqi oil exports weighed on overall OPEC oil production helped stem the pace of falling prices.
Reports show OPEC oil exports fell by 151,000 barrels per day during October from September. Much of that drop was due to the Iraq conflict which affected a key oil field’s ability to produce and move oil.
Concerns over OPEC output cap extensions
Also weighing on the oil price, is growing concern that the current oil production cap agreement between OPEC and some non-OPEC members - including Russia - might not be extended beyond the March 2018 end-date.
The next official OPEC meeting will take place on November 30 in Vienna. And, up until recently, it was anticipated the oil output cap agreement would be extended, potentially to the end of 2018.
However, a number of reports suggest the extension of the agreement is no longer considered a done deal.
“There’s now just a 50-50 chance of an announcement coming after this meeting, and I wouldn’t have said that even a week ago,” said Michael Poulsen, an analyst at Global Risk Management Ltd, according to a Bloomberg report. “It is suddenly a very mixed picture.”