Oil declines continue ahead of OPEC meeting

Prices have surged more than 85% since 12-year low in February

Oil futures lost as much as 0.4 per cent in New York after dropping 0.5 per cent the previous two sessions. Photograph: iStock

Oil futures lost as much as 0.4 per cent in New York after dropping 0.5 per cent the previous two sessions. Photograph: iStock

 

Oil slid for a third day as Canadian producers moved to resume output after wildfires and as the Organisation of Petroleum Exporting Countries (Opec) delegates prepare to meet in Vienna to discuss production policy.

Futures lost as much as 0.4 per cent in New York after dropping 0.5 per cent the previous two sessions.

Suncor Energy restarted oil-sands operations in the regional municipality of Wood Buffalo as fires eased amid cooler weather.

Opec will discuss issues including an output freeze when the group gathers on June 2nd, said Iraq’s deputy oil minister Fayyad Al-Nima, who will head his ministry’s delegation to the meeting.

Oil has surged more than 85 per cent since slumping to a 12-year low in February on signs the worldwide surplus is easing amid declining production from the US to Nigeria.

Opec is unlikely to reach any agreement to limit output when it meets Thursday as the group sticks with Saudi Arabia’s strategy of squeezing out rivals, according to analysts surveyed by Bloomberg.

“The Saudi strategy is clear and it seems there is less incentive for Opec to do anything given the policy they have in place is starting to work,” said Ric Spooner, a chief analyst at CMC Markets in Sydney.

“Significant price gains from here would be a real indication of confidence.”

West Texas Intermediate for July delivery fell as much as 20 cents to $49.13 a barrel on the New York Mercantile Exchange and was at $49.20 just before 1pm Hong Kong time.

The contract lost 15 cents to close at $49.33 on Friday. Total volume traded was about 52 per cent below the 100-day average.

- Bloomberg