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Brent crude extended losses below $80 a barrel amid signs that OPEC remains unwilling to reduce output to ease a supply glut. West Texas Intermediate fell before inventory data.
Brent slid as much as 2.1 percent to the lowest since September 2010. Speculation of a price war within OPEC "has no basis in reality," Saudi Arabia Oil Minister Ali Al-Naimi said yesterday. Slumping oil prices reflect a growing consensus among traders and investors that OPEC will maintain output, Goldman Sachs Group Inc. said. Crude stockpiles in the U.S. rose for a sixth week, a Bloomberg News survey showed before government data today.
"The market is looking for any signs of OPEC production cuts but it doesn't look like Naimi is in a hurry to do that," said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. "The market is just testing OPEC's resolve. It's full speed ahead until something changes."
Brent for December settlement, which expires today, dropped $1.29, or 1.6 percent, to $79.09 a barrel at 9:02 a.m. New York time on the London-based ICE Futures Europe exchange after falling to $78.71. The more active January contract was down $1.35 at $79.77. The volume of all futures traded was about 27 percent above the 100-day average for the time of day.
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