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Oil moves lower as Saudi Arabia dismisses need for OPEC intervention

Published 08/26/2016, 04:18 AM
© Reuters.  Crude loses ground as Saudi minister downplays need for intervention

Investing.com - Oil prices were lower in early European trade on Friday, as the Saudi energy minister shrugged off the need for OPEC to intervene to stabilize markets.
Crude oil for October delivery on the New York Mercantile Exchange shed 13 cents, or 0.27%, to trade at $47.20 a barrel by 4:10AM ET (8:10AM GMT), near the intraday low of $47.14.

On Thursday, New York-traded oil futures jumped $0.56, or 1.20%, to end at $47.33.

Meanwhile, on the ICE Futures Exchange in London, Brent oil for October delivery shed 39 cents, or 0.79%, to trade at $49.28 a barrel, after gaining $0.62, or 1.26%, to end at $49.67 in the prior session.

Crude prices soared almost $10 a barrel, or nearly 25%, in the first three weeks of August, as the prospect of an output freeze by major producers at an informal OPEC meeting in Algeria next month sparked a massive rally.

However, futures are down nearly 3% so far this week, as analysts and traders remain skeptical the meeting would result in a coherent effort to reduce the global glut.

Saudi Arabian Energy Minister Khalid Al-Falih told Reuters late on Thursday that "we don't believe any significant intervention in the market is necessary other than to allow the forces of supply and demand to do the work for us", adding that the "market is moving in the right direction" already.

An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.

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