Oil Dips Below $79 as Market Doubts OPEC

Oil market "will stabilize itself" - Saudi oil minister.

Brent crude oil steadied below $79 a barrel on Wednesday after Saudi Arabia signalled it was unlikely to push for a major change in OPEC oil output despite a collapse in prices.

Saudi Arabian Oil Minister Ali al-Naimi said he expected oil "to stabilise itself eventually", a comment traders understood to mean that the cartel would not cut output when oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) meet on Thursday in Vienna.

"He effectively ruled out an output cut," Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt, told Reuters Global Oil Forum.

Oil prices have dropped by a third since June and some OPEC members have called for the cartel to reduce production sharply in an attempt to tighten the market. Predictions for the OPEC meeting range from a large output cut to no action at all.

Benchmark Brent futures were down 5 cents at $78.28 a barrel by 1215 GMT. U.S. crude was down 11 cents at $73.98.

Core Gulf producer United Arab Emirates sided with Saudi Arabia on Wednesday, saying the group should not panic as oil prices would soon stabilise.

"The market will fix itself ultimately," UAE Oil Minister Suhail bin Mohammed al-Mazroui told Reuters in an interview.

Iranian Oil Minister Bijan Zangeneh told reporters some OPEC members, but not Iran itself, believed it was time to defend market share in the face of growing supplies from non-OPEC nations.

Weak economic data from Asia's biggest economies further suppressed prices.

"The U.S. economy is doing great but most everyone else is struggling, creating more downside than upside risks to growth," U.S.-based PIRA Energy Group said in a weekly report.

India's economic growth probably slowed to around 5 percent in the three months to September, slipping from 5.7 percent in the previous quarter.

Asia's top economy, China, cut interest rates last week, indicating slowing growth, while Japan's economy slipped into recession in the third quarter.

The United States upgraded its reading on third quarter gross domestic product to 3.9 percent on Tuesday from 3.5 percent reported last month.
 

By Jack Stubbs and Ahmed Aboulenein