* Russia says producer meeting will have little binding
commitment
* OPEC reduces oil demand growth outlook, warns of further
cut
* Goldman Sachs (NYSE:GS) says U.S. shale producers become more
productive
By Henning Gloystein
SINGAPORE, April 14 (Reuters) - Oil prices were pulled down
in early trading on Thursday as OPEC warned of slowing demand
and major exporter Russia hinted that there would only be a
loose agreement with little commitments at the upcoming exporter
meeting to rein in ballooning oversupply.
Meanwhile, Goldman Sachs said that productivity gains by
U.S. shale producers were keeping alive its "deflationary
outlook" for oil prices as drillers manage to adjust to lower
prices and keep pumping instead of going out of business.
Brent crude futures LCOc1 were at $43.89 a barrel at 0028
GMT, 29 cents below their last close.
U.S. West Texas Intermediate (WTI) futures CLc1 were at
$41.60, down 16 cents.
Prices came under pressure after Russian oil minister
Alexander Novak told a briefing that a deal on an oil output
freeze scheduled this weekend will be loosely-framed with few
detailed commitments.
This would make it less likely that the meeting by top
exporters in Qatar's capital Doha next Sunday will manage to
successfully rein in production that means some 2 million
barrels of crude is being pumped every day in excess of demand.
"The agreement will not be very rigidly formulated, it is
more of a gentlemen's agreement," one of those present told
Reuters, paraphrasing Novak's words at the gathering.
A second person present said: "There is no plan to sign
binding documents. It will be a kind of heads of agreement, a
communique."
With the likelihood of a binding freeze by the Organization
of the Petroleum Exporting Countries (OPEC) and Russia fading,
analysts will look to the U.S. oil industry to see if lower
drilling will result in falling production.
Here too, however, the outlook is for production to remain
higher than many expected.
"Shale productivity gains remain a key driver of our
long-term deflationary outlook for oil prices," said Goldman
Sachs.
"Our analysis of shale productivity... (are) broadly in line
with our expectations for 3 percent to 10 percent yoy
(year-on-year) increases," it added.
With supplies pointing to an ongoing glut, much will depend
on the demand-side to determine the size of the market's
oversupply.
While oil consumption has been near records, supported
largely by demand in Asia, OPEC on Wednesday cut its forecast
for global demand growth in 2016 and warned of further
reductions.
World demand will grow by 1.20 million barrels per day (bpd)
in 2016, OPEC said in its monthly report, 50,000 bpd less than
expected previously.
"Economic developments in Latin America and China are of
concern... Current negative factors seem to outweigh positive
ones and possibly imply downward revisions in oil demand growth,
should existing signs persist going forward."
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