Daily Times

LONDON: Oil prices slipped below $50 a barrel on Friday and were set for the biggest weekly losses in six weeks over doubts about whether producers will be able to agree on an output cut big enough to curb a global glut that has weighed on markets for two years.

Experts from the Organization of the Petroleum Exporting Countries and counterparts from other oil-producing nations such as Russia started two-day negotiations on Friday over an output-capping agreement expected to be presented at the end of next month.

However, hopes for a milestone deal were slim as disagreements remain over which members should be exempt from a curb to reduce output to a range of between 32.5 and 33 million barrels per day (bpd).

Russia thinks an output freeze could be short-lived due to an expected quick recovery in US shale oil production, Interfax news agency said, citing Russia’s energy ministry.

Brent crude futures were down 51 cents at $49.96 a barrel by 1318 GMT. The contract was set to close the week more than 3 percent lower, in its steepest weekly loss since mid-September.

US West Texas Intermediate (WTI) crude was down 46 61 cents at $49.11 a barrel, also on track for its biggest weekly loss in six weeks.

“Doubts linger about OPEC’s ability or willingness to implement any production cuts,” said analysts at Cenkos Natural Resources.

“The market has been wary of reading too much into the rhetoric ahead of the next meeting scheduled for the end of November.”

Analysts at Commerzbank said the success of an output deal will depend on whether Gulf producers Saudi Arabia, the United Arab Emirates, Kuwait and Qatar are willing to implement production cuts on their own if no agreement can be reached with other producers.

French oil major Total said on Friday it expected crude prices to remain volatile and would continue to reduce costs. It said it loses around 2 billion euros in cashflow for every $10 downward move in oil prices.

Weak prices have also hit Italy’s ENI, which reported a worse-than-expected quarterly loss on Friday. However, US majors Exxon Mobil and Chevron were able to beat expectations thanks to steeper cost cuts.