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Wednesday, October 4, 2023

Oil dips as Saudi rejects producer summit, set for weekly fall

By Meeyoung Cho

SEOUL (Reuters) – Crude oil prices eased on Friday due to a strong dollar and Saudi Arabia’s dismissal of a producer summit, putting prices on track for a small weekly fall despite a strong rally in the previous session.

October Brent, the global oil benchmark, shed 16 cents to $ 48.73 a barrel as of 0352 GMT after it settled up $ 1.31, or 2.8 percent, on Thursday at $ 48.89 a barrel.

October U.S. crude lost 29 cents to $ 45.63 a barrel after it settled up $ 1.77, or 4 percent, at $ 45.92 a barrel.

Saudi Arabia believes a summit of oil producing countries’ heads of states would fail to produce concrete action toward defending oil prices, sources familiar with the matter said on Thursday.

The comments followed a meeting of Gulf Arab oil ministers with Qatar’s emir in Doha, at which a Venezuelan proposal for an OPEC and non-OPEC summit was discussed.

The U.S. dollar edged higher in Asian trading on increased chances of more easing in Japan. A firmer U.S.dollar makes oil more expensive for holders of others currenciees.

Oil prices rallied on Thursday after U.S. Energy Information Administration (EIA) data showed demand for gasoline over the latest four-week period rose almost 4 percent on a year ago.

While crude inventories rose by 2.6 million barrels to 458 million barrels in the past week, compared with analysts’ expectations for an increase of 933,000 barrels, crude stocks at the Cushing, Oklahoma, delivery hub fell by 897,000 barrels to 56.41 million barrels, EIA said.

“Crude oil stocks appear to be stabilising as refinery demand continues to fall, not surprisingly as refining margins have considerably weakened,” BNP Paribas said in a note.

Russia’s energy minister expects cuts in global shale oil production to help stabilise the oil market. Alexander Novak also reaffirmed that Russia, one of the world’s top oil producers, would not cut its own production.

Asian shares rose on Friday following gains on Wall Street, while the dollar firmed after facing pressure from a rise in the yuan, but gains were capped by uncertainty over whether the Federal Reserve will raise interest rates next week.

The U.S. labour market appeared to gain momentum as fewer Americans filed for weekly unemployment benefits, but weak inflation pressures may complicate the rate decision.

(Reporting by Meeyoung Cho; Editing by Richard Pullin)

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