The Philadelphia Energy Solutions oil refinery. Picture: REUTERS
The Philadelphia Energy Solutions oil refinery. Picture: REUTERS

Singapore — Oil prices fell on Friday, pulled down by Opec’s decision to delay a final decision on output cuts, awaiting support from non-Opec heavyweight Russia.

International Brent crude oil futures fell below $60 a barrel early in the session, trading at $59.50 a barrel at 1.44am GMT, down 56c, or 0.9% from their last close.

US West Texas Intermediate (WTI) crude futures were at $51.24 a barrel, down 25c, or 0.5%.

The declines came after crude slumped by almost 3% the previous day, with producer cartel Opec ending a meeting at its headquarters in Vienna, Austria, on Thursday without announcing a decision to cut crude supply, instead preparing to debate the matter on Friday.

“Opec has decided to meet Friday again … [as] Russia remains the sticking point,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

Analysts still expect some form of supply reduction to be decided.

“We are beginning to witness the outline of the next iteration of production cuts, with Opec conforming to cut its own production by around 1-million barrels a day, with the cartel lobbying non-Opec members to contribute more,” Japanese bank MUFG said in a note.

Supply surge and price plunge

Oil producers have been hit by a 30% plunge in crude prices since October as supply surges just as the demand outlook weakens amid a global economic slowdown.

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.

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

The surge is largely down to soaring US crude oil production, which has jumped by 2.5-million barrels a day since early 2016 to a record 11.7-million barrels a day, making the US the world’s biggest oil producer.

As a result, the US last week exported more crude oil and fuel than it imported for the first time on records going back to 1973, according to data released on Thursday.

Reuters