Oil futures have eased to session lows in Asia struggled for consistent direction early Monday in Asia, moving back and forth across Friday's closing level ahead of an Organization of the Petroleum Exporting Countries meeting.
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The two-day gathering in Abu Dhabi will discuss members' compliance level to the output pact the cartel inked with 10 other oil suppliers, including Russia, in late 2016. The deal so far hasn't produced meaningful effects to tamp down global output or inventories.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September was recently down 0.1% at $49.52 a barrel in the Globex electronic session. October Brent crude on London's ICE Futures eased 0.1% to $52.38.
Prices settled higher on Friday, resulting in futures finishing the week little changed, amid a solid U.S. employment report and Baker Hughes' weekly count showing a net decline of one the past week in active U.S. oil-drilling rigs.
One major development the market will be watching for out of the OPEC meeting is if Libya will join the agreement to cap output. The Africa supplier, along with Nigeria, were exempted from the initial deal because their output were marred by monthslong militant attacks. However, as now both nations are pumping closer to their peak levels there is a growing view that they should also abide by production caps.
According to S&P Global Platts, the combined July output of both African producers was 590,000 barrels above October's. a baseline that deal participants used to determine their production caps. The OPEC's own official monthly report will be published on Thursday.
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There is a "mix of optimism, and perhaps sustained hope, that more compliance can be achieved" at the OPEC meeting, said Barnabas Gan, an economist at the Singapore-based OCBC.
Some analysts say the market shouldn't worry too much about OPEC's recent production figures because countries like Saudi Arabia usually boost their production during the summer to meet peak domestic energy demand. Stuart Ive, a client manager at OM Financial, said focus instead should by on August export cuts some OPEC members have said they will make.
Among refined products, Nymex September diesel was recently down 0.2% at $1.6452 a gallon, reformulated gasoline blendstock fell 0.2% to $1.6432 and August ICE gasoil shed 0.2% to $487 per metric ton.
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(END) Dow Jones Newswires
August 06, 2017 22:29 ET (02:29 GMT)