Oil drops on doubts over output cuts

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New York

Oil prices fell on Thursday on doubts over the ability of top crude producers to agree to extend record output cuts, heightened by worries over a build in U.S. fuel inventories.
Brent crude futures LCOc1 were down 48 cents, or 1.2%, at $39.31 a barrel by 11:17 a.m. ET (1517 GMT). U.S. West Texas Intermediate (WTI) crude CLc1 futures dropped 74 cents, or 2%, to $36.55.
Saudi Arabia and Russia, two of the world’s biggest oil producers, want to extend cuts of 9.7 million barrels per day (bpd) that major producers agreed to in April. But a suggestion by the Organization of the Petroleum Exporting Countries’ current president Algeria to meet on Thursday was delayed amid talks about poor compliance by some producers.
OPEC and allies led by Russia, a group known as OPEC+, could still hold a ministerial video conference this week if Iraq and others which have not fully complied with existing supply cuts agree to boost their adherence, three OPEC+ sources told Reuters.
Saudi Arabia, Kuwait and the United Arab Emirates are not planning to extend voluntary additional output cuts of 1.18 million bpd after June, indicating that crude supply could rise next month regardless of any OPEC+ decision.
“OPEC appears ‘damned if they do and damned if they don’t’ with regard to extended near term production reductions,” Jim Ritterbusch, president of Ritterbusch and Associates, said.—Reuters