Oil prices climb after OPEC signals possible deal extension
Oil prices inched higher on Monday after one of the most bearish weeks in months, propped up by OPEC comments signaling the possibility of continued action to restore market balance in the long term, APA reports quoting Anadolu Agency.
Oil production platforms in the Gulf of Mexico also started returning to service after Hurricane Nate forced the shutdown of more than 90 percent of crude output in the area. The prospective restarts kept price gains in check.
Nate has become a post-tropical cyclone that continues to pack heavy rain and gusty winds, the U.S. National Hurricane Center (NHC) said on Monday.
About 85 percent of U.S. Gulf of Mexico oil production is offline in the aftermath of Hurricane Nate, the U.S. Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE) said.
“Quiet market overall this morning though (refined) products are weaker as it looks like Nate was a non-event for refining,” said Scott Shelton, broker at ICAP in Durham, North Carolina.
Separately, Total SA (TOTF.PA) completed the restart of units shut by Hurricane Harvey at its 225,500 barrel per day (bpd) Port Arthur, Texas, refinery not involved in an overhaul planned prior to the storm that hit late in August, the company said.
“I think that without the support of products and Brent, the market may get dragged lower in the near term as it’s apparent that the market doesn’t care much about OPEC already jawboning about an extension of the deal,” Shelton said.
The Organization of the Petroleum Exporting Countries is due to meet in Vienna on Nov. 30, when it will discuss its pact to reduce output in order to prop up the market.
OPEC Secretary-General Mohammad Barkindo said on Sunday consultations were under way for an extension of the agreement beyond March 2018 and that more oil-producing nations may join the pact, possibly at next month’s meeting.
He also said OPEC members and other producers may have to take some “extraordinary measures” to ensure the market is in balance in the long term.
In a speech to the Reuters Global Commodities Summit on Monday, Barkindo said he saw clear evidence the oil market was rebalancing.
Global benchmark Brent crude LCOc1 settled up 17 cents at $55.79 a barrel at 1:25 p.m. EDT (1725 GMT). Earlier in the session it touched a three-week low of $55.06. It ended last week 3.3 percent lower, its biggest weekly loss since June 2017.
U.S. West Texas Intermediate (WTI) crude futures CLc1 ended the session up 0.6 percent or 29 cents higher at $49.58 a barrel. They came close to a four-week low when they fell to $49.13 earlier in the session. WTI’s losses last week came to 4.6 percent.
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