Thursday, 13 December 2018

Oil ends lower on Iran comments despite Libya, OPEC supply cuts

Oil ended lower on Wednesday after reports that Iran's oil minister said divisions exist within the Organization of the Petroleum Exporting Countries, leading futures to give up earlier gains on OPEC-led production curbs and export cuts from Libya.

Crude pared gains late in the session after reports that Iran's Oil Minister Bijan Zanganeh told state television that the cartel had been unfriendly toward OPEC's third largest producer.

OPEC last week agreed to production cuts only after Iran, whose crude exports have been depleted by U.S. sanctions since early November, greenlighted the deal.

OPEC said on Wednesday it had offset a drop in sanctions-hit exports from Iran. Iran's President Hassan Rouhani also said on state TV on Tuesday that export have improved since early November.

Earlier in the trading day, prices rose, bolstered by export cuts from Libya and planned OPEC-led production cuts.

Brent crude futures settled at $60.15 a barrel, down 5 cents on the day, while U.S. crude was down 50 cents at $51.15 a barrel.

Oil prices have fallen by a third since the start of October, when it hit a four-year high above $87. It is set for its biggest quarterly slide since the fourth quarter of 2014.

The market also shrugged off government data that showed U.S. crude stockpiles fell 1.2 million barrels last week, a much smaller drawdown than the 10 million-barrel decline reported by industry group the American Petroleum Institute and less than half the draw of 3 million barrels analysts had forecast.

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