Opec Flag
Market losing faith in Opec's ability to cut production at its next meeting. Reuters

Oil futures remained below $50 per barrel on Friday (28 October), as traders showed an increasing lack of faith in Opec's ability to deliver on its promise of an output cut in agreement with Russia.

Overnight reports suggested Opec members could cut their individual production by as much as 4%. However, doubts over the cartel's ability to enforce a production cut it first proposed in September returned with a vengeance in early Asian trading.

More market reports

At 5:01pm BST, the West Texas Intermediate front month futures contract was down 0.97% or 85 cents to $49.24 per barrel, while Brent was 0.89% or 47 cents lower at $49.97 per barrel, as losses widened in Europe with the weekend approaching.

Even positive third quarter economic growth figures from the US, in at 2.9%, failed to support the oil price. FXTM research analyst Lukman Otunuga said WTI bulls were installed with false inspiration on Wednesday after a surprise drawdown in US crude inventories slightly eased some oversupply concerns.

"The short-term gains were erased after uncertainty over the success of November's pending Opec meeting haunted investor attraction towards oil. It is becoming quite clear that the persistent oversupply fears and concerns that demand may be waning have gripped oil leaving prices vulnerable to losses.

"The commodity remains heavily pressured on the daily timeframe and a breakdown below $49.00 could trigger a steeper selloff towards $47.50."

Away from the oil market, precious metals, weighed down by a stronger dollar, finally saw a marginal uptick. The Comex gold futures contract for December delivery was up 0.05% or 60 cents to $1,270.04 an ounce, still well shy of $1,300-plus levels seen in September.

Elsewhere, the Comex silver contract for December delivery was up 0.20% or 4 cents at $17.68 an ounce, while spot platinum was 1.34% or $12.90 higher at $977.20 an ounce.

Fawad Razaqzada, market analyst at Forex.com, said gold and silver have been stuck between a rock and a hard place. "On the one hand, the mild equity market selloff and uncertainty surrounding the US presidential election, among other risks, have been supportive for the perceived safe haven metals.

"On the other hand however, the dollar and government bond yields have been rallying, which have dampened the appeal of these non interest-bearing and dollar-denominated precious metals."