Oil pares losses on report OPEC to consider new output ceiling

NEW YORK (Bloomberg) -- Oil pared declines following a report that OPEC may consider a new production ceiling at Thursday’s meeting.

 

Futures rebounded after Reuters cited four sources as saying the Organization of Petroleum Exporting Countries may discuss output targets at the Vienna talks. OPEC will probably stick to its policy of squeezing out rivals by maintaining production as the price rally helps justify the group’s strategy, according to analysts surveyed by Bloomberg. 

 

"I would call it a victory lap," Jeff Currie, head of commodities research at Goldman Sachs, said in a Bloomberg Television interview. OPEC "successfully engineered a market that rebalanced on its own."

 

West Texas Intermediate for July delivery declined 30 cents, or 0.6%, to $48.80/bbl at 11:35 a.m. on the New York Mercantile Exchange after earlier falling as much as 2.7% to $47.75/bbl. Futures briefly topped $50 Tuesday for the second time this year.

 

Brent for August settlement dropped 30 cents, or 0.6%, to $49.59/bbl on the London-based ICE Futures Europe exchange. The July contract expired Tuesday after slipping 7 cents to $49.69.