London — Crude oil futures lost ground in European morning trading Friday amid an absence of clear guidance from producing nations.
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At 11:46 GMT January ICE Brent crude futures was down by 67 cents from Thursday's close to $58.84/b while the January NYMEX light sweet crude contract fell 78 cents to $50.67/b.
Some analysts have been bearish about the direction of the market as an OPEC meeting looms. Representatives from the group of oil-producing nations will meet in Vienna next week followed by a session with the 10 non-OPEC producers, or OPEC+.
Prices have also been impacted as world leaders meet for the G20 meeting in Buenos Aires this week and overall there has been a lack of definite guidance from producing nations, analysts said.
Russian President Vladimir Putin said Thursday that the current price range is above his country's fiscal breakeven level and that Russia was comfortable in a $60/b environment. Meanwhile, Saudi Energy Minister Khalid al-Falih said the recent price slump showed OPEC and non-OPEC oil producers that they should take collective action to balance global oil markets.
There are grounds for the bulls to hope, according to some. "We expect OPEC+ will cut production after evaluating the arguments for and against," analysts at UBS said in a research note. "We believe that memories of late 2014, when OPEC failed to cut production and Brent oil prices nosedived to $45/b in January 2015, remain fresh," they said.
"OPEC demonstrated in 2016 that it is possible to build a consensus for the benefit of all producers. The question now is whether the pressure to cut is strong enough," UBS analysts said, adding that they believe it is as current oil prices are below the fiscal breakeven for many OPEC+ countries, according to the bank's calculations.
--Tom Washington, email@example.com