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Oil prices dropped about $2 a barrel on Monday to hit one-months low on doubts about OPEC’s planned production cut and a build in U.S. crude inventories at the Cushing, Oklahoma storage hub.
Officials from the Organization of the Petroleum Exporting Countries (OPEC) and non-member producers met in Vienna on Saturday, but did not come to specific terms, agreeing only to meet again before a scheduled regular OPEC meeting on Nov. 30.
On Friday, talks in Vienna between OPEC members sputtered following objections from Iran, which has been reluctant to even freeze its output, sources said.
A Reuters poll on Monday showed reservations over OPEC’s ability to reach an agreement to limit output prompted analysts to leave their price outlook broadly unchanged.
Also, a survey showed that OPEC’s output was likely to hit another record high in September, as Nigerian and Libyan production partially recovered after disruptions.
Brent’s front-month contract, which expires after Monday’s session, was down $1.50 at $48.20 a barrel by 11:02 a.m. EDT (1502 GMT). It hit $48.17, its lowest since Sept. 29.
The more active next-month Brent contracts were down $1.39 at $49.29 a barrel.
U.S. West Texas Intermediate futures settled down $1.84, or 3.8 percent, at $46.86, the lowest close since Sept. 27.
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“The market is becoming a bit weary,” said Kyle Cooper, analyst at ION Energy in Houston. “Unless OPEC can circle the wagon and get everyone on the same page, the market’s going to be skeptical.”
Compounding the bearish sentiment was data from energy monitoring service Genscape, cited by traders, which showed a build of 585,217 barrels of crude at the storage hub and delivery point for WTI futures in Cushing in the week to Oct. 28.
Global oil prices have risen by as much as 13 percent, encouraging a recovery in the industry after OPEC announced on Sept. 27 a production cut to boost prices after a slump that began mid-2014.
But General Electric Co, which announced on Monday it would merge its oil-and-gas business with Baker Hughes Inc , said the move assumes a “slow” oil price recovery.
A representative for oil transport company Euronav NV said on Monday it is unlikely that OPEC will push up prices due to Iran and Iraq, which has also resisted cuts.
OPEC had not specified how much each individual member should cut, saying that will be finalized at the Nov. 30 meeting.
Non-member Russia had agreed to talks to cooperate, but a draft federal budget showed it expects to increase its output by 0.7 percent next year and 0.9 percent in 2018.
(Additional Reuters reporting by Libby George in London and Aaron Sheldrick and Osamu Tsukimori in Tokyo; Editing by Marguerita Choy)