- Markets Insider
Oil reversed course after a strong start on Tuesday.
West Texas International crude, the US benchmark, was down by 0.5% at $50.08, while Brent crude oil, the international benchmark, was lower by 0.7% at $55.06 per barrel at 12:16 p.m. ET.
The commodity’s prices climbed earlier in the morning after Iraqi oil minister Jabbar al-Luaibi said that although there’s “no firm decision yet,” some producers are thinking about deeper and longer cuts.
“Some think that cuts should be extended beyond March, three or four months, or six months, or maybe till the end of 2018,” he said, according to Bloomberg. “Some, like Ecuador and other countries, even Iraq, think there should be another cut of 1%.”
On Friday, OPEC’s Joint Ministerial Monitoring Committee is meeting in Vienna. Attendees are expected to draft the cartel’s “2018 action plan” ahead of the cartel’s meeting in November, said Helima Croft, global head of currency strategy at RBC Capital Markets, in a research note published two weeks back.
“We believe that momentum continues to build for extending the output agreement beyond April, but finding a way to bring currently exempted countries into the agreement and curbing cheating looks more challenging,” she said.
The cartel and several other major producers (but not the US) first agreed to slash production back in November 2016, with the Saudis agreeing to the deepest cut. The decision to reduce production reflected producers’ desires to end the global supply glut, which kept oil prices depressed for over two years and increased domestic financial stresses.