(Bloomberg) -- Oil slumped as OPEC and its allies urged members to adhere to pledged production cuts and the International Energy Agency highlighted the difficulty the group faces in balancing the market.
Futures in New York fell by 1.2% on Thursday for a third day of declines. While the Organization of Petroleum Exporting Countries didn’t discuss deepening agreed-upon supply curbs at their meeting in Abu Dhabi, they did put pressure on members to implement promised cuts. The producer group faces a daunting task as supply from competitors grows, the IEA said.
“There was hope that the group would announce something today” about deeper cuts that might reassure the market, said Phil Flynn, senior market analyst at Price Futures Group Inc. But the group may be putting off a decision on further supply curbs because of the uncertainty surrounding U.S.-Iran tensions, he said.
Prices earlier had a brief bump higher on news that Trump administration officials were considering an interim trade agreement with China but White House officials denied that report, according to CNBC.
Oil has fallen more than 16% from its April peak as the prolonged U.S.-China trade spat has dented the outlook for global demand. The IEA’s report on Thursday highlighted the scale of the challenge facing producers as supply is expected to surge in countries -- including America -- that aren’t part of the OPEC+ agreement.
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The cartel and its allies on Thursday responded to growing concerns that a slowing economy could tip the oil market back into surplus by pressing all members to reduce output. The group could revisit the matter of deepening output cuts in December, Oman’s Oil Minister Mohammed Al Rumhy told reporters.
West Texas Intermediate crude for October delivery fell 66 cents to settle at $55.09 a barrel on the New York Mercantile Exchange.
Brent for November settlement fell 43 cents to settle at $60.38 a barrel on the ICE Futures Europe Exchange, and traded at a $5.33 premium to WTI for the same month.
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