Oil extends decline after worst month since July as OPEC meets

Oil extended losses after its biggest monthly decline since July as OPEC showed few signs of slowing its production heading into this week’s policy meeting.

Futures fell as much as 1.2 percent in New York.

The Organization of Petroleum Exporting Countries pumped 32.12 million barrels a day in November, keeping output above its quota for an 18th month, according to a Bloomberg survey of companies and analysts.

Crude stockpiles in the U.S., the world’s largest oil consumer, probably dropped for the first time in 10 weeks, a separate Bloomberg poll showed before government data Wednesday.

Oil prices have fallen almost 40 percent the past year as a record surplus persisted amid a global producers’ fight for market share.

OPEC is meeting Dec. 4, a year after Saudi Arabia led an agreement to keep production high and drive out higher-cost shale rivals in the U.S. While the group’s output slid from October, Iran and Libya are among members to have signalled plans to increase supply.

“The market is in a wait-and-watch mode with an eye to the end of the week, which will give direction to what’s going to happen not only in December but also to the first quarter of next year,” said Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland. “The consensus is OPEC will not change its policy.”

West Texas Intermediate for January delivery fell 46 cents to $41.19 a barrel on the New York Mercantile Exchange at 1:59 p.m. London time. The contract lost 6 cents to $41.65 on Monday.

Total volume was about 12 percent above the 100-day average. Prices decreased 11 percent in November.

Brent for January settlement was 53 cents lower at $44.08 a barrel on the London-based ICE Futures Europe exchange. It fell 10 percent in November. The European benchmark crude was at a premium of $2.82 to WTI.

OPEC’s production dropped by 33,000 barrels a day in November, led by declines from Nigeria and Libya, the Bloomberg survey showed. While total output shrank, Saudi Arabia and Iraq, the group’s two biggest producers, both pumped more oil than in October.

“There will be a certain level of jitters in the market as the OPEC meetings draws closer,” Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA in London said by e-mail. “While the market consensus is looking for the status quo, there will be question marks raised at the meeting in terms of accommodating an eventual return of additional Iran production as well as integrating Indonesian back into the OPEC fold.”