Oil eased off four-month highs on Monday as doubts over oil producers reaching a meaningful output cut deal brought some speculators to unwind bullish bets.
Global benchmark Brent crude futures LCOc1 were down 23 cents at $51.70 a barrel at 0848 GMT, more than 2 percent lower than the four-month high reached on Friday.
U.S. futures CLc1 also retreated from last week’s highs, and were last down 30 cents at $49.51 a barrel.
“Prices are down on profit-taking by speculators who ramped up net long positions big time in early October. They have increasing doubts over the promised OPEC production cuts,” said Carsten Fritsch, commodities analyst at Commerzbank in Frankfurt.
The Organization of the Petroleum Exporting Countries (OPEC) plans to agree on an output cut by the time it meets in late November. The goal is to cut production to a range of 32.50 million barrels per day (bpd) to 33.0 million bpd.
Saudi Arabia’s Energy Minister Khalid al-Falih said on Monday that OPEC should not cut oil supply too steeply, already hinting at milder market intervention.
“It is a very gentle hand on the wheel, we are not doing anything dramatic,” Falih said, speaking at the World Energy Congress in Istanbul, where several oil producers will hold sideline talks.
Analysts at ABN Amro took a cautious view on an OPEC deal, saying previous hints by the group at output cuts have always failed to have been followed up by action.
“Adding to these doubts is the realization that certain OPEC countries are demanding to be treated as exceptions,” analysts said, referring to Libya and Nigeria, whose production has been affected by domestic unrest.
OPEC members Iran and Iraq are also not attending this week’s Istanbul meetings, sources told Reuters, despite previous expectations that they would be present.