NEW YORK, Nov 12 — Oil dropped to the lowest in almost two months in New York on rising Opec output after a volatile week driven by uncertainty about the group’s intentions and the surprise election of Donald Trump.

Futures fell 2.8 per cent yesterday. Iran and Iraq, which want exemptions from an Organisation of Petroleum Exporting Countries accord to cut production, told the group they raised output last month, while Saudi Arabia pumped near record levels.

Oil has dropped about 15 per cent from its October high on growing doubts that Opec will be able to finalise the Algiers accord at its Nov 30 summit amid a refusal to cut output from almost a third of its members.

“Oil is falling today because of Opec’s self-inflicted wounds,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “Opec members are confessing to large increases in production that might make achieving their Algiers deal an impossibility.”

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The International Energy Agency, the Paris-based adviser to some of the world’s biggest economies, said it’s waiting to see whether President-elect Trump’s rhetoric on Iran hardens into action before revising its market forecasts.

While investors took comfort from Trump’s conciliatory acceptance speech on Wednesday, rising US crude supplies served as a reminder of the inventory overhang.

West Texas Intermediate for December delivery dropped US$1.25 (RM5.35) to US$43.41 a barrel on the New York Mercantile Exchange. It’s the lowest close since Sept. 19. The contract declined 1.5 per cent this week. Total volume traded was about nin‌e per cent above the 100-day average.

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Exchange records

WTI open interest on Nymex passed two million contracts for the first time ever Thursday, according to data on the CME website. Aggregate volume slipped from a record set on Wednesday, with 1.34 million contracts changing hands.

Brent for January settlement fell US$1.09, or 2.4 per cent, to US$44.75 a barrel on the London-based ICE Futures Europe exchange. It’s the lowest close since Aug 10. Prices slipped 1.8 per cent this week. The global benchmark ended the session at a 60-cent premium to January WTI.

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose to the highest since February. A stronger US currency usually reduces the appeal of dollar-denominated raw materials as an investment. The Bloomberg Commodity Index fell to the lowest since Sept 1.

“We have too much oil, something the IEA report yesterday and Opec today makes clear,” said Stephen Schork, president of the Schork Group Inc, a consulting company in Villanova, Pennsylvania. “The dollar’s rocketed, which is putting downward pressure on commodities.”

Iran, Iraq

Iran, freed from curbs on its oil trade in January, said it increased output by 210,000 barrels a day to 3.92 million a day in October from the previous month, according to a monthly report from Opec. Secondary sources showed a more modest addition of 27,500 barrels a day for October.

The report was updated later yesterday to include a submission from Iraq, which didn’t initially provide an output level. Iraq told the organisation that it produced 4.776 million barrels a day in October, 215,000 barrels a day more than Opec’s own estimate.

Opec, led by Saudi Arabia, decided in November 2014 against curtailing production to support oil prices and instead to pump at capacity to increase market share.

This drove crude to a 12-year low in January this year and pushed high-cost US production down. Following more than two years of low prices, Opec reversed its policy in September, saying it would cut production for the first time in eight years.

“In this year of outlier outcomes it’s not out of the question that the Saudis will decide to change course and pump all they can since everyone else is,” Kilduff said.

December gasoline futures fell 2.4 per cent to US$1.3053 a gallon. Diesel for December delivery declined 2.5 per cent to US$1.4012, the lowest settlement since Sept 19. — Bloomberg