Oil prices dip, talks with Saudi Arabia on output doubtful

The Dollar Business Bureau 

The prices of oil dropped on Friday after the energy minister of Saudi Arabia tempered prospects of strong market intervention by oil producers during the discussions to be held next month, and as analysts hinted towards an ongoing supply overhang which was impacting the markets. 

Brent crude international benchmark prices LCOc1 were trading at $49.46 a barrel at 0658 GMT, a drop of 21 cents from their last close. 

The prices of US West Texas Intermediate (WTI) crude CLc1 declined to 10 cents at $47.23 per barrel. 

Khalid Al-Falih, Energy Minister of Saudi Arabia told Reuters on Thursday, “We don't believe any significant intervention in the market is necessary other than to allow the forces of supply and demand to do the work for us.”   

“The market is already moving in the right direction,” he had added. 

Members of the intergovernmental organisation, OPEC (Organization of Petroleum Exporting Countries), will hold a meeting on the sidelines of the International Energy Forum (IEF) from September 26-28 in Algeria. 

The comments of the Saudi Arabian Energy Minister put a dampener on the prospects of a meaningful interference into the market that has been steadfast by the oil oversupply for over two years. 

Iran on Friday said that it would collaborate with other oil producers to stabilise the markets. However, it anticipates other countries to respect its individual rights. 

However, several analysts interpreted that as Iran said it would try and reclaim its market share by increasing production after lifting of the sanctions against the country,  meant that the country would be allowed a full return to oil markets.