Oil falls toward $44 on report Saudis threatened to hike oil output

Oil prices were on course for their sixth straight day of falls on Friday, dragged lower by a surge in U.S. crude inventories, timid demand and doubts over the ability of producers to coordinate output cuts.

Futures extended losses after Reuters reported Saudi Arabia threatened to raise oil output steeply to bring prices down if Iran refuses to limit its supply.

Clashes between the two OPEC heavyweights, which are fighting proxy wars in Syria and Yemen, have become frequent in recent years.
A meeting of OPEC experts last week, designed to work out details of cuts for the next OPEC ministerial gathering on Nov. 30, saw Saudis and Iranian clashing again, according to four OPEC sources who were present at the meeting and spoke to Reuters on condition of anonymity.

“The Saudis have threatened to raise their production to 11 million barrels per day and even 12 million bpd, bringing oil prices down, and to withdraw from the meeting,” one OPEC source who attended the meeting told Reuters.

OPEC headquarters declined to comment on discussions during the closed-door meetings last week. Saudi and Iranian OPEC delegates also declined official comments.

Brent crude futures were at $45.76 per barrel at 8:40 a.m. ET (1225 GMT), down 59 cents from their last close.U.S. West Texas Intermediate (WTI) futures were down 41 cents at $44.25 a barrel.
Prices ticked slightly lower after the Labor Department reported the U.S. economy added fewer jobs than expected on October, though wages rose.

The dips put crude on the longest losing run since June and, before that, since January, with Brent shedding almost 14 percent since its recent peak in mid-October.

“There has been a very strong retreat and technically, prices are starting to reach oversold levels,” Olivier Jakob of consultancy Petromatrix said.

Analysts said markets were also weighed down by traders pulling out money from futures ahead of the U.S. presidential election, which is seen as a risk to markets.

Global share prices fell to their lowest levels since early July on Friday on uncertainty over the election outcome.

Beyond election concerns, traders said fundamentals were weak, with U.S. crude stocks surging, demand growth low, and doubts that the Organization of the Petroleum Exporting Countries and non-OPEC producer Russia can agree on a meaningful output cut this month.