Oil prices near $50 as Opec prepares for talks with Iraq

Oil traded near $50 a barrel with Opec's secretary-general set to visit Baghdad on Tuesday for talks aimed at resolving a deal on output after Iraq said it should be exempt from planned cuts.

Futures were little changed in New York after falling 0.7 per cent on Monday.

Mohammed Barkindo will meet with the prime minister and oil minister, according to people familiar with the matter, after Iraq said on Sunday it should be excluded due to conflict with Islamic militants.

Oil has fluctuated near $50 a barrel amid uncertainty about whether Opec can implement an accord to reduce oil output when they gather at an official meeting in November. A committee will meet later this month to try to resolve differences over how much individual members should pump.

“Oil is in a holding pattern, waiting to see the outcome of the November meeting,” said David Lennox, a resources analyst at Fat Prophets in Sydney. “If Opec doesn’t implement the production cuts the oil price will probably retreat back toward the $45 a barrel level.”

December delivery

West Texas Intermediate for December delivery was at $50.51 a barrel on the New York Mercantile Exchange, down 1 cent, at 1.28pm in Hong Kong. Prices slid 33 cent to close at $50.52 on Monday. Total volume traded was about 42 per cent below the 100-day average.

Brent for December settlement was 9 cent lower at $51.37 a barrel on the London-based ICE Futures Europe exchange. The contract dropped 32 cent, or 0.6 per cent, to $51.46 on Monday. The global benchmark crude was at a premium of 87 cent to WTI.

Russia is making progress toward an output agreement with Opec, Russian energy minister Alexander Novak said on Monday after talks with officials from the group in Vienna. The discussions addressed "concrete" production levels, he said, declining to elaborate. – Bloomberg