Oil prices drop over output cut doubts

Singapore – Oil prices dipped yesterday over lingering doubts that some producers might not implement announced production cuts in an attempt to curb global oversupply.

Brent crude futures, the benchmark for international oil prices, were trading at $56.76 per barrel, down 13 cents from their close the previous day. In the United States, West Texas Intermediate (WTI) crude futures were at $53.65 a barrel, 11 cents below their last settlement.

Analysts said that current prices were around break-even levels for many producers, providing little reason for much bigger rises, barring unforeseen outages.

“Since the OPEC cut announcement, oil prices are above the $54 per barrel level which we believe is the... cash breakeven for the sector in 2017,” US investment bank Jefferies said.

Yesterday’s dips came after prices increased the previous day following reports of supply cuts from Saudi Arabia and Abu Dhabi coming into effect as part of efforts by the Organisation of the Petroleum Exporting Countries and other producers to curb a global supply glut.