Oil ‘is trapped between $40 and $50 a barrel’

Tokyo stocks led a broad retreat in Asian markets as the yen recovered, while regional energy firms struggled with crude prices on concern about the chances of success at an upcoming producers’ meeting.
OPEC and Russia are due to meet later Wednesday in Algeria to discuss a global oil glut and overproduction that has strangled prices for more than two years.
However, hopes for a deal to limit output were hit Tuesday by Iran, which said it would not accept a collective freeze — meaning that others, particularly Saudi Arabia, are also unlikely to agree one.
The news sent both main contracts plunging almost three percent. And on Wednesday they only managed meek recoveries, with West Texas Intermediate up seven cents at $44.74 and Brent 13 cents higher at $46.10.
“OPEC members are peddling their self-interests, and while that’s the case, there can’t be a cooperative effort,” Michael McCarthy, chief market strategist in Sydney at CMC Markets, told Bloomberg News.
“There is little possibility of that coming together. Oil is trapped between $40 and $50 a barrel, and at this stage there doesn’t appear to be anything on the horizon to break prices out of that range.”
Energy firms from Sydney to Hong Kong were in the red, in line with losses on broader stock markets.
In Tokyo the Nikkei index closed down 1.3 percent, with a stronger yen dampening buying appetite.
The dollar bought 100.62 yen in Asian trade, slightly up from 100.36 yen in New York but it was still struggling after falling from the 100.88 yen seen earlier Tuesday in Asia.
Shanghai lost 0.3 percent by the close, Seoul shed 0.5 percent and Singapore dipped 0.1 percent in the afternoon, while there were also losses in Bangkok and Jakarta.
But Hong Kong staged a late burst to end 0.2 percent up and Sydney also closed slightly higher.
In early European trade London and Paris each rose 0.3 percent and Frankfurt put on 0.6 percent.
The broad losses followed gains in Asia and New York Tuesday after Hillary Clinton was judged to have won the first presidential debate over Republican Donald Trump, with the Democrat considered a safer pair of hands politically and economically.
In Hong Kong the Postal Savings Bank of China was slightly higher at the end of its first trading day after the world’s biggest initial public offering for two years.
PSBC, China’s fifth largest lender, raised $7.4 billion in the IPO, the biggest since Alibaba’s $25 billion New York listing in 2014.
But analysts attributed the lukewarm interest to the recent flat performance of large Chinese financial firms on Hong Kong’s bourse owing to the glut of options.
Standard Chartered Bank ended down more than one percent in Hong Kong a day after it acknowledged it was being investigated by the US Department of Justice over claims that an Indonesian subsidiary had paid bribes to secure contracts.
The Wall Street Journal said an internal audit at Indonesian energy company Maxpower Group found evidence of possible bribery and US prosecutors were examining whether Standard Chartered was culpable for not stopping it.

Source: Arab News