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Oil rises on OPEC hopes

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Posted by Bloomberg

Click HERE to Read the Article by the Publisher.


Oil climbed near $45 a barrel after Algeria said OPEC may turn its informal talks next week into a formal session and as weekly industry data showed U.S. crude inventories declined.

November futures rose by as much as 2.5 percent in New York. OPEC ministers can transform the gathering into an extraordinary meeting since they’ll all be present, Algerian Energy Minister Noureddine Bouterfa said on public radio. Supply needs to be cut by 1 million barrels a day to rebalance the market and stabilize prices, he said. U.S. crude stockpiles dropped by 7.5 million barrels last week, the American Petroleum Institute was said to report Tuesday.

Oil has fluctuated since August’s rally on speculation the Organization of Petroleum Exporting Countries and Russia will agree on ways to stabilize the market at the meeting. While Venezuelan President Nicolas Maduro said members are close to a deal, all but two of 23 analysts surveyed by Bloomberg said an agreement to limit production is unlikely. A deal to freeze output was proposed in February but a meeting in April ended with no final accord.

“The chances of something happening are increasing,” said Jamie Webster, a fellow at the Center on Global Energy Policy at Columbia University in New York. “It’s still not likely to be a substantive agreement. But we are moving in the right direction to where they might actually do something.”

U.S. Supplies

West Texas Intermediate for November delivery rose as much as $1.09 to $45.14 a barrel on the New York Mercantile Exchange and was at $44.92 shortly before 7:20 a.m. Central. The October contract expired Tuesday after advancing 14 cents to close at $43.44. Total volume traded Wednesday was 17 percent below the 100-day average.

Brent for November settlement rose as much as $1, or 2.2 percent, to $46.88 a barrel on the London-based ICE Futures Europe exchange. Prices dropped 7 cents, or 0.2 percent, to $45.88 on Tuesday. The global benchmark traded at a $1.81 premium to WTI.

Diverging from the API, a Bloomberg survey shows U.S. crude stockpiles probably increased by 3.25 million barrels last week. Inventories at Cushing, the delivery point for WTI, probably rose by 100,000 barrels, according to the survey. The Energy Information Administration will release the data later Wednesday.

For a story on the possible outcomes from the OPEC meeting, click here.

OPEC will hold an informal meeting on the afternoon of Sept. 28 after the closing session of the International Energy Forum conference, Bouterfa said. Oil needs another six to nine months to stabilize within a range of $50 to $60 a barrel, he said.


Tags: oil, energy, crude, petroleum


Posted by Bloomberg

Click HERE to Read the Article by the Publisher.

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