Oil set for weekly decline as OPEC may maintain output

Crude oil traded near $68 a barrel, poised for the biggest decline in eight weeks, on speculation OPEC will keep output steady as gasoline demand slows with the end of the US summer driving season.

OPEC will probably maintain its output target at 24.845 million barrels a day at a policy meeting next week, according to all 26 analysts surveyed by Bloomberg. Floor trading for oil in New York will be closed for Labor Day, marking the end of the peak gasoline consumption period in the US, the world’s biggest oil user.

“It’s the seasonality that’s pushed everything down,” said Jonathan Kornafel, a director for Asia at options traders Hudson Capital Energy in Singapore. “You expect to see crude demand drop in September. You’re going to see gasoline demand drop. Heating oil demand is pretty anemic in the beginning of autumn so I wouldn’t expect to see too much strength.”

Crude oil for October delivery traded at $68.23 a barrel, up 27 cents, on the New York Mercantile Exchange at 2:05 p.m. in Singapore. Yesterday, the contract slipped 9 cents to $67.96. Oil has declined more than 6 percent this week, the biggest drop since the week to July 10.

OPEC members, due to meet in Vienna Sept. 9, have implemented about 71 percent of the 4.2 million barrels a day of supply cuts agreed on last year. The group pumps 40 percent of the world’s oil.

Tags:  OPEC