Oil hovers at $50 as doubts linger over Opec tactics

Oil prices were stable on Thursday, lingering at about $50 a barrel, as doubts over the Organisation of the Petroleum Exporting Countries’s ability to organise a co-ordinated production cut weighed on markets, while firm demand and concerns over Venezuela’s stability offered support.

International Brent crude oil futures were trading at $50.09 per barrel early on Thursday, up 11 cents from their last close.

West Texas Intermediate futures were at $49.30 per barrel, up 12 cents from their previous settlement.

Traders said Brent was struggling on doubts that Opec and non-Opec producers such as Russia would be able to effectively co-ordinate curbs in output to prop up prices.

Tentative accord

“Investors remain uncertain as to whether Opec can implement the tentative agreement to cut production,” ANZ bank said on Thursday.

A cut is being pushed by Saudi Arabia, Opec's biggest producer, and it is being supported – at least by word – by Russia, not a member of the cartel but the world's biggest oil producer.

However, Opec's number-two producer, Iraq, has said it would not cut output, arguing it needs the revenue to fight the Islamic State, and the government is trying to lure investors to boost output further from its current record 4.43 million barrels per day.

In US crude markets, West Texas Intermediate futures received support from a 553,000-barrel draw in crude inventories to 468.16 million barrels. – (Reuters)