Oil prices down in Asian trade

INQUIRER FILE PHOTO

SINGAPORE – Oil prices slipped in Asia Monday but losses were limited by speculation that the OPEC cartel would be forced to cut output to prevent further big losses, analysts said.

US benchmark West Texas Intermediate for December delivery fell 25 cents to $75.57 while Brent crude for January was down 31 cents at $79.10 in mid-morning trade.

Crude was supported by “speculation that OPEC will put a floor on prices by curbing output now that Brent is trading persistently below $80”, said Desmond Chua, market analyst at CMC Markets in Singapore.

Singapore’s United Overseas Bank (UOB) said expectations are for the recent price plunge to “force OPEC to cut production”.

Prices sank to four-year lows last week following remarks by ministers from the Organization of the Petroleum Exporting Countries (OPEC) that it is unlikely to slash output.

But analysts now say the losses could push the 12-nation cartel to cobble together a deal to cut output, despite resistance from some members.

Venezuela and Ecuador have called publicly for a cut.

However, Saudi Arabia, the world’s top producer and OPEC’s kingpin, has cut prices on crude exports to the US market in a move seen by some as an effort to maintain market share as it faces competition from rising US shale oil production.

OPEC’s next meeting is set for November 27 in Vienna, home to the cartel’s headquarters.

Singapore’s UOB said dealers will be scrutinizing the minutes of the US Federal Reserve’s October policy meeting for further clues on when short-term interest rates will be cut next year. The minutes will be released on Wednesday.