Opec under pressure to cut output as price of crude continues to drop


saudi oil fieldOil fell for a second straight day on Tuesday as traders looked beyond price defense attempts by Russia and Venezuela and toward Saudi Arabia and OPEC for fresh leads on whether the group will cut output when it meets later this month.

Saudi Arabia, the most powerful member of the Organization of the Petroleum Exporting Countries and the world’s No. 1 oil exporter, raised crude shipments in September, data showed on Tuesday, despite signs of an oversupplied market.

Benchmark Brent crude settled down 84 cents at $78.47 a barrel, after falling as low as $78.21. Brent fell in six of the past seven sessions, touching four-year lows of $76.76 on Friday.

Front-month U.S. crude ended down $1.03 at $74.61 after an intraday bottom of $74.23. U.S. crude hit a September 2010 low of $76.30 on Friday.

After settlement, U.S. crude slipped about another 40 cents a barrel by 4:50 p.m. EST (2150 GMT). After the market closed, the American Petroleum Institute (API) said crude stockpiles in the United States rose by 3.7 million barrels last week. Analysts had expected a drop of 800,000 barrels.

On Wednesday, the U.S. government’s Energy Information Administration will issue official data for the week ended Nov. 14.

OPEC will meet in Vienna on Nov. 27. Venezuela and Russia are among oil exporters trying to get the group to cut output and boost prices following Brent’s 30 percent fall since June.

“We’re trading every OPEC headline now, but it’s what the Saudis say, or don’t, that will make a difference over the next nine days, barring what OPEC’s stand itself is as a group,” said Joseph Posillico, senior vice president of energy futures at Jefferies LLC in New York.

Venezuelan President Nicolas Maduro said on Monday a special global meeting on oil price defense was being planned “very soon.” Russian oil firm Rosneft is also sending its chief executive to Vienna on Nov. 25.

Saudi Arabia has not agreed to an output cut, and Venezuela has less influence in OPEC than Riyadh. Russia, a big oil producer but not an OPEC member, had failed in the past to persuade the group to cut.

Goldman Sachs said in a research note Brent might have to fall to $60 to slow output without an OPEC cut.