Crude Oil Near $45 Before OPEC Talks as Japanese Stocks Slide

(Bloomberg) -- Oil traded near $45 a barrel before major producers meet to discuss output constraints in Algiers, while Japanese stocks dropped and Malaysia’s ringgit weakened.

Crude recouped less than a quarter of the last session’s 2.7 percent drop, a loss that was spurred by Saudi Arabia saying it doesn’t expect a production accord to be forged when OPEC ministers meet in the Algerian capital on Wednesday. Japan’s Topix index fell the most in two weeks as most of its member stocks began trading without the right to a dividend. Futures foreshadowed losses in Hong Kong equities, while Taiwan markets were shut for a second day owing to a hurricane.

U.S. equities bounced Tuesday after data showed American consumer confidence rose to the highest level since 2007, and after shares of Deutsche Bank AG stabilized following their slump to a record low. Crude has been volatile over the past week, swinging in tune with prospects of a deal in Algiers. Saudi Oil Minister Khalid Al-Falih said there were a number of potential market stabilization pacts being discussed, but that a deal on Wednesday was unlikely. The comments came as Iran signaled it was unwilling to freeze production and wanted to raise output to 4 million barrels a day.

“The chances of a deal being reached are shrinking,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “The more we hear, the greater the doubts.”

For more on the outlook for the Algiers talks, click here.

Stocks

The MSCI Asia Pacific Index declined 0.5 percent as of 9:23 a.m. Tokyo time. The Topix fell 1.1 percent as some 1,095 stocks on the gauge trade without the right to a dividend on Wednesday. Benchmarks advanced in Australia and New Zealand.

Futures on the S&P 500 Index slipped 0.1 percent after the underlying index gained 0.6 percent on Tuesday, led higher by technology and consumer stocks. Contracts on Hong Kong’s Hang Seng Index dropped 0.5 percent.

Commodities

Crude oil advanced 0.5 percent to $44.90 a barrel in New York, having recorded moves of more than 2 percent on each of the last five days. Prices are firming after industry data indicated U.S. supplies fell by 752,000 barrels last week.

Saudi Arabia’s Al-Falih said that Iran, Nigeria and Libya “have special conditions” when it comes to a pact. The Algiers discussions are being held amid a backdrop of anxiety over a worldwide crude glut. The International Energy Agency says supply and demand won’t be in balance until late 2017.

Gold for immediate delivery was little changed at about $1,327 an ounce, following last session’s 0.8 percent retreat. The surge in U.S. consumer confidence damped demand for the metal as a store of value on Tuesday.

--With assistance from Mark Shenk To contact the reporter on this story: Emma O'Brien in Wellington at eobrien6@bloomberg.net. To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net, Andreea Papuc

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