SINGAPORE- Crude prices extended losses in Asia Tuesday as the prospects of a production cut by the OPEC oil cartel dimmed, despite a global supply glut, analysts said.
US benchmark West Texas Intermediate (WTI) for December delivery fell 11 cents to $77.29 while Brent crude for December eased 22 cents to $82.12 in mid-morning trade.
WTI tumbled $1.25 in New York on Monday after Kuwait said the 12-nation Organisation of the Petroleum Exporting Countries is unlikely to cut output when it meets in Vienna on November 27.
Brent fell $1.05 in London to its lowest settlement price since October 2010.
“I do not expect OPEC to make any production cut. A decision like this will be very difficult,” Kuwaiti oil minister Ali al-Omair said Monday at a conference in Abu Dhabi, cited by the official KUNA news agency.
Michael McCarthy, chief market strategist at CMC Markets in Sydney, said the comments added pressure to an already bearish crude market.
“The weakness in prices reflects a realisation among investors on the difficulty of OPEC getting through an agreement on cutting output to deal with global oversupply,” McCarthy told AFP.
“It is quite clear that a number of OPEC countries would prefer a cut, but there will be considerable resistance from Saudi Arabia,” he added.
Oil prices plunged to multi-year lows last week after Saudi Arabia, OPEC’s kingpin and the world’s top producer, cut its prices for crude sold to the US market.
Analysts interpreted the move as an effort to maintain market share as it faces competition from cheaper oil from US shale fields.
OPEC pumps about a third of global crude and is currently producing just under 31 million barrels per day, around one million higher than its ceiling.
Investors are also monitoring the situation in east Ukraine as fears increase of a resumption of all-out fighting between government forces and pro-Russian rebels in violation of a ceasefire agreement.
Ukraine is a key conduit for Russian natural gas exports to Europe.