Oil Prices Weighed as Iraq Signals Doubts Over OPEC Cu

24-Oct-2016

Oil prices were nearly flat Monday amid doubts over OPEC’s proposed output cut, after Iraq signaled it wants to be excluded from the pact.

Brent crude, the global oil benchmark, rose 0.1% to $51.83 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.1% at $50.80 a barrel.

Iraqi oil officials Sunday were reported to have said they would not scale back output, which currently stands at 4.77 million barrels a day. Iraq is the second largest Organization of the Petroleum Exporting Countries producer after Saudi Arabia, making its commitment to any cut to OPEC’s oil output key. OPEC members are scheduled to meet Nov. 30 to discuss individual production quotas, to limit the group’s production under 33 million barrels a day. However, many market observers are bracing for the deal to flop given the members’ record of not complying with quotas. 

 “There is a risk that Iraq’s refusal could trigger a domino effect that other producers would ask to be exempt from the cuts too,” said Gao Jian, an energy analyst at SCI International. (By SARAH MCFARLANE and  JENNY W. HSU, WSJ)