Brent crude and West Texas Intermediate prices shed more than one per cent as Opec production data reignites glut fears

Francesca Washtell
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Oil prices are hovering around the mid-$40 mark (Source: Getty)

Oil prices have been tracking lower today as the ongoing supply glut and fears that an Opec conference later this month will not result in a production cap weighed on the market.

After lifting yesterday, the price of US sweet crude was trailing down 1.34 per cent, or 60 cents, in early afternoon trading to $44.06.

Global benchmark Brent crude dipped 53 cents, or 1.16 per cent, keeping it below the $46 level it has averaged at in recent days to $45.31.

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In the last 10 days prices have wiped out the gains made since late September, when a provisional agreement to curb oil output by 700,000 barrels per day (bpd) buoyed investor sentiment and for a time sent both Brent and West Texas Intermediate crude above $50 a barrel.

Today, the 14-member strong Organisation of the Petroleum Exporting Countries (Opec) said its output reached another record high last month, when it pumped 33.64m bpd, up 240,000 bpd from September.

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That means the cartel, beset by geopolitical squabbles among some of its states, would have to cut up to a million bpd if it makes good on its promise to reduce its output to between 32.5m bpd and 33m bpd.

Yesterday, the International Energy Agency warned the market could be flooded with "relentless" oversupply next year if the consortium does not cap production, as other producers coming online and flat demand will keep adding to the existing glut.

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