Singapore — Crude oil futures were lower during mid-afternoon trade in Asia Thursday on indications of an uptick in production in Saudi Arabia and the UAE ahead of the OPEC meeting later in the day.
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At 2:29 pm Singapore time (0629 GMT), ICE February Brent crude futures were down 43 cents/b (0.70%) from Wednesday's settle at $61.13/b, while the NYMEX January light sweet crude contract was 54 cents/b (1.02%) lower at $52.35/b.
The OPEC producer group pumped 40,000 b/d more crude in November than the month before at 33.08 million b/d, the highest monthly total since July 2017, a survey by S&P Global Platts showed.
OPEC's largest producer Saudi Arabia was largely responsible for the increase, pumping 11.02 million b/d in November, up 350,000 b/d from October and setting a record monthly high for the second consecutive month, the survey showed.
The UAE's output rose 130,000 b/d over the same period to 3.3 million barrels, the survey showed.
OPEC will meet later Thursday in Vienna for fraught talks over output cuts for 2019, with 10 key non-OPEC partners led by Russia joining the negotiations Friday.
"The market has no idea what OPEC will do tonight," said Fat Prophets resource analyst David Lennox.
"The rhetoric has been all over the place leading into this meeting. Markets built in around a 1.1 million to 1.2 million b/d cut but recent rhetoric [from Iran] has put that call in limbo. When uncertainty reigns, markets tend to weaken," he added.
Iran will seek an exemption from any OPEC production cut agreement, the country's oil minister Bijan Zanganeh said on arrival in Vienna. He added that while the US maintains sanctions targeting Iranian oil sales, "we won't participate in any agreement on production."
"A huge bear movement in global oil benchmarks, along with a massive liquidation in long positions by money managers, has dampened market confidence in oil prices considerably," said Phillip Futures investment analyst Benjamin Lu.
"Russia has been cited as a potential wildcard as Moscow has been ambivalent over market share and oil margin considerations into 2019. We opine that OPEC/non-OPEC will be committed towards production limits in today's [Thursday] meeting to avoid an extended loss in market confidence and oil prices beyond 2018," Lu added.
OANDA's head of trading Stephen Innes said: "Risk sentiment continues to melt in Asia, which is having a far-reaching effect across global equities and currency markets.
"We are closely watching developments in Asia after reports that Canada has arrested the Huawei CFO facing US extradition for allegedly violating Iran sanctions. This headline is quite significant as the US government is attempting to persuade allies to stop using Huawei equipment due to security fears, and this headline could weigh negatively on tech stocks," he added.
The market is also awaiting US crude inventory data from the Energy Information Administration that is due for release later Thursday for further price cues.
As of 0629 GMT, the US Dollar Index was 0.03% higher at 97.030.
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