An oil well is seen near Denver, Colorado. Picture: Reuters
An oil well is seen near Denver, Colorado. Picture: Reuters

Singapore — Oil prices fell along with weak stock markets on Thursday, but trading was tepid ahead of a meeting by producer group Opec that is expected to result in a supply cut aimed at draining a glut that has pulled down crude prices by 30% since October.

International Brent crude oil futures were at $61.04 a barrel at 5.31am GMT, down 52c, or 0.8% from their last close.

US West Texas Intermediate (WTI) crude futures were at $52.38 a barrel, down 51c, or 1%.

Traders said oil prices were being weighed down by weak global financial markets, which saw stock markets tumble on Thursday.

Since early October, crude oil has lost about 30% of its value amid surging supply and fears that an economic downturn will erode fuel demand.

“A massive liquidation in long positions by money managers has dampened market confidence on oil prices considerably,” said Benjamin Lu of Singaporean brokerage Phillip Futures.

Opec is meeting at its headquarters in Vienna, Austria, on Thursday to decide its production policy.

Led by Saudi Arabia, Opec’s crude oil production has risen by 4.1% since mid-2018, to 33.31-million barrels a day.

Oil output from the world’s biggest producers — Opec, Russia and the US — has increased by 3.3-million barrels a day since the end of 2017, to 56.38-million barrels a day, meeting almost 60% of global consumption.

The increase alone is equivalent to the output of major Opec producer United Arab Emirates (UAE).

Russia, a major oil producer but not a member of Opec, will meet with the producer cartel on Friday to discuss production levels, and it is widely expected that a supply cut will be agreed.

“Markets … believe the production cut deal will be in range of 1-million to 1.3-million barrels a day,” ANZ bank said on Thursday.