By Henning Gloystein
SINGAPORE (Reuters) – Crude futures dipped early on Friday as traders doubted that a planned meeting over the weekend of major oil exporters would result in successful measures to rein in ballooning global over production.
Brent crude futures (LCOc1) were at $ 43.81 a barrel at 0056 GMT, 3 cents below their last close.
U.S. West Texas Intermediate (WTI) futures (CLc1) were down 5 cents at $ 41.45.
A group of oil producers, lead by top exporters Saudi Arabia and Russia, plan to meet in Qatar’s capital Doha on Sunday to agree on measures to freeze output around current levels in an effort to rein in a global supply glut that sees some 2 million barrels of crude a day produced every day in excess of demand.
But with discussions focussing around freezing output at or near current record levels, most analysts say they have little hope that a potential Doha deal will reduce the glut that has pulled down crude prices by as much as 70 percent since 2014.
“The Doha meeting does not materially change the oil market balances,” Barclays bank said.
Instead of pushing prices up, Barclays said an agreement could prevent prices from otherwise falling further.
“If recent supply-side fundamental support holds and the market’s expectations for a credible statement and commitment are met, the meeting could help prevent prices from falling back to the low $ 30 range.”
Energy consultancy Wood Mackenzie said that “even if an output freeze is announced, we do not expect a genuine one to occur during the remainder of 2016.”
Instead, Wood Mackenzie said it expected “OPEC output to rise 0.5 million barrels per day year-on-year in 2016, with most of that growth coming from Iran and Iraq, both of whom have indicated plans to grow output in 2016.”
(Reporting by Henning Gloystein; Editing by Joseph Radford and Michael Perry)
