Oil falls amid supply glut, lower prospects of output freeze

New York/ New Delhi: Amid the recent fluctuation in global crude oil rates, prices fell on Friday, in a situation of supply glut following indications from Saudi Arabia that no output freeze was in the offing.

Members of the 13-nation Organisation of Petroleum Exporting Countries (OPEC), of which Saudi Arabia is a leading member, will meet on the sidelines of the International Energy Forum in Algeria September 26-28.

US West Texas Intermediate was trading lower early on Friday at $47.23 a barrel on the New York Mercantile Exchange, while Brent crude was trading at $49.46, 21 cents lower than its previous close, on the London ICE Futures Exchange.

OPEC member Iran, which has been ramping up production to its pre-sanctions levels despite the recent supply glut, said on Friday that it would cooperate with other producers to stabilize oil markets, adding, however that it expected others to respect its individual rights.

Following its June meeting in Vienna when it decided against an output cut, OPEC, which accounts for 40 per cent of global crude output, said in a statement that its members were committed to a "stable and balanced oil market and that the market is moving through the balancing process".

The price of the OPEC basket of 13 crudes closed at $45.28 a barrel on Thursday.

Instead, the Indian basket, composed of 73 per cent sour grade Dubai and Oman crudes and the rest by sweet grade UK Brent, closed trade on Thursday at $46.66 per barrel, as compared to $46.58 "on the previous publishing day" on Tuesday, as per official data.

Oil prices have recently surged over 80 per cent, from a 12-year low in January, mainly on account of a weaker US dollar.

Making its previous fortnightly revision in fuel prices on August 16, state-run Indian Oil Corp cut the price of transport fuels, of petrol by Re 1 a litre and of diesel by Rs 2, both at Delhi, with corresponding decrease in other states.