Oil fell after the longest run of gains in four years as Iraq seeks to increase exports amid a global overhang of crude inventories and as Nigerian militants call an end to hostilities.
Futures fell as much as 1.2 percent in New York after climbing 16 percent over the previous seven sessions amid speculation informal OPEC talks next month may lead to action to stabilize the market. Iraq will boost crude shipments by about 5 percent in the next few days after an agreement to resume exports from three oil fields in Kirkuk. The Niger Delta Avengers declared an end to attacks on oil infrastructure and will conduct talks with the government, according to a statement on the website claiming to represent the group.
Oil has climbed more than 20 percent to enter a bull market on Thursday, less than three weeks after it tumbled into a bear market. Russian Energy Minister Alexander Novak said that the nation was open to discussing an output freeze, while Chakib Khelil, former president of the Organization of Petroleum Exporting Countries, said the group is on course to agree to cap output because its biggest members are pumping flat-out. A similar plan was proposed in February, but a meeting in April ended with no accord.
“Given the huge rally, it’s not surprising to see some softening,” said Angus Nicholson, a market analyst in Melbourne at IG Ltd. “The price is probably more sensitive than usual to any negative news.”
West Texas Intermediate for September delivery, which expires Monday, slid as much as 57 cents to $47.95 a barrel on the New York Mercantile Exchange. The contract rose 30 cents to close at $48.52 on Friday for a seventh day of gains, the longest run since July 2012. The more-active October futures were 61 cents lower at $48.50 a barrel at 10:48 a.m. in Hong Kong. Total volume traded was about 14 percent above the 100-day average.
Brent for October settlement dropped as much as 80 cents, or 1.6 percent, to $50.08 a barrel on the London-based ICE Futures Europe exchange. The contract slipped 1 cent to close at $50.88 on Friday. The global benchmark crude traded at a premium of $1.60 to WTI for October.
Iraq will increase exports by about 150,000 barrels a day as shipments resume from the Baba Gorgor, Jambour and Khabbaz fields, Fouad Hussein, a member of the oil and energy committee of the Kirkuk provincial council, said by phone Sunday. The nation is the second-biggest OPEC producer, pumping 4.36 million barrels a day last month, according to data compiled by Bloomberg.