Oil halts rally as market weighs chance of output freeze

Singapore, Aug 16 (AFP) Oil prices eased in Asia tradetoday but held above USD 45 a barrel as the market weighed thepossibility of major producers reaching an agreement to freezeoutput during a meeting next month. Members of the Organization of Petroleum ExportingCountries (OPEC) as well as non-members are scheduled to meetinformally in Algeria in September, and Saudi Arabia’s oilminister Khalid al-Falih has hinted that discussions couldinclude actions to stabilise prices. His remarks last week sparked a price rally as they werewidely seen as a suggestion that OPEC could revive talks ontrimming high output levels. Prices continued their rise overnight after Russian EnergyMinister Alexander Novak said his country was working withSaudi Arabia to achieve oil market stability – hinting at apossible production freeze in cooperation with OPEC. In New York, US crude jumped USD 1.25 to close at USD45.74, but halted its incline in Asian trade. Analysts said there were doubts an accord would bereached. "Some doubt about a possible deal to freeze output couldhave set in," IG Markets Singapore analyst Bernard Aw toldAFP. Aw recalled that a previous attempt to freeze output atJanuary 2016 levels failed in April after Saudi Arabia said itwanted all producers, including Iran, to be part of theagreement. Iran had refused, saying it needed to regain market sharelost during years of Western economic sanctions over itsnuclear ambitions. The sanctions were lifted in January. "Investors are wondering: if Iran doesn’t participate inany such discussions, would Saudi Arabia still be amenable?"Aw said. At around 0950 IST, US benchmark West Texas Intermediatefor delivery in September was down 26 cents, or 0.57 per cent,to USD 45.48 and Brent crude for October dropped 30 cents, or62 per cent, to USD 48.05. "The chances of a deal actually occurring at next month’sOPEC meeting are minimal," Angus Nicholson, a strategist at IGMarkets, said in an email commentary. "The Saudis are happy to commit to some sort of OPEC-widesupply freeze deal so long as Iran is party to it. And Iranrefuses to agree to any deal that will inhibit them fromlifting their oil output to pre-sanctions levels." Saudi Arabia, the biggest exporter in the OPEC producers’group, in May also replaced its veteran oil minister Ali al-Naimi with Khalid al-Falih, who is thought to be, if anything,less amenable to a production cut. (AFP)CPS