Oil prices drop ahead of Opec meeting
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Oil prices drop ahead of Opec meeting

30 November 2016 11:32

The price of benchmark crude oil has fallen almost 4% as traders question whether Opec can agree on a deal to limit production, the BBC reported.

In September the oil exporting cartel members voted for the first production cut in eight years.

Details of the agreement are due to be finalised at a formal Opec meeting in Vienna on Wednesday.

But key Opec members appear to disagree over the plan and some analysts believe the meeting may not produce a deal.

Indonesian Energy Minister Ignasius Jonan said he was not sure Opec would manage to forge an agreement: "I don't know. Let's see. The feeling today is mixed."

Brent crude oil was down $1.76 per barrel at $46.48, and US crude was down $1.80 at $45.28.

Analysts at Barclays said: "Volatility is set to be high in the oil market in the days ahead."


In-depth negotiations will be needed on Wednesday to cement a deal, Goldman Sachs analysts said.

"The latest headlines suggest that while there is a broad agreement on the rationale for a cut, political considerations and country level quota negotiations are so far preventing a deal from being reached," Goldman Sachs said.

In September Opec pledged to limit production by about 700,000 barrels a day, although Iran was being allowed to increase production.

Disagreements between Iran and its regional rival, Saudi Arabia, had blocked earlier attempts to reach a deal.

Many of Opec's smaller members wanted limits after oil prices fell from $110 a barrel over the past two years after oversupply and slowing demand.