Crude prices fall on Russia's mixed response to OPEC deal

A monthly report from the Organization of the Petroleum Exporting Countries (OPEC) on Wednesday showed the producer group pumped 33.39 million barrels per day last month, up 220,000 barrels per day from August.

The forum is taking place after late September's OPEC deal to set the cartel's output ceiling at 32.5-33 million barrels a day.

Fedun, who is also Lukoil's second-largest shareholder, welcomed limits as a mechanism to support prices and investment, saying companies need about $80/bbl to go ahead with long-term plans. They aim to draw up a plan before a meeting November 30 in Vienna.

Crude oil prices slipped on Tuesday, retreating from one-year highs, after mixed responses by Russian oil industry officials toward an OPEC call for all major crude producers to cut output. Russia's output was more than 11 million barrels - the highest since the collapse of the Soviet Union.

Iran, OPEC's third largest member, had said it would not curb its supplies before it reached 4 million barrels per day, a level it had seen before global sanctions were imposed in 2012 and lifted in January this year.

The International Energy Agency believes oil markets could be rebalanced if a deal can be struck.

According to the report, global oil supply rose by 0.6 mn bpd in September, with non-OPEC up almost 0.5 mn bpd on higher Russian and Kazakh flows and OPEC at an all-time high of 33.64 mn bpd, on robust Middle East production. "OPEC has effectively abandoned its free market policy set in train almost two years ago".

Bulging inventories worldwide were a problem too and might possibly extend the glut of supplies through the first half of 2017, the IEA said.

Shares of Marathon Oil (MRO) were declining in early-afternoon trading on Wednesday as oil prices retreated. Timelines and country-by-country breakdowns have still to be worked out, though Iran, Libya and Nigeria may be exempt from the cuts for various reasons.

Saudi Arabia, the biggest producer within OPEC, cut its production by 87,500 barrels a day in September.

It's also unclear how much non-OPEC members, notably Russian Federation, will play along. So his comment at the World Energy Congress here Monday, to the effect that Russian Federation is ready to join OPEC in limiting oil output, raised eyebrows and moved the oil futures market. Prices tumbled after OPEC, led by Saudi Arabia, adopted a policy of pumping without limits to try to squeeze higher-cost production, including some USA shale output, from the market.

Brent crude LCOc1 was up 9 cents at $52.50 a barrel at 0012 GMT.

Why are crude oil prices down today?

"At this stage, it is hard to assess how the OPEC supply cut, if enforced, will affect market balances", the agency added.

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