Brent stays above $60 per barrel
LONDON, October 30, 2017 – Oil started the week off with mixed readings after last week’s nearly 5% rise as investor sentiment in black gold continued to be buoyed by hopes of extension to the OPEC-led deal to curb production.
U.S. crude showed cautious trade around the unchanged mark Monday with the benchmark unable to hold the $54 mark, though the London barrel managed to extend gains.
The U.S. West Texas Intermediate crude December contract slipped 2 cents, or 0.04%, to $53.88 a barrel by 5:12AM ET (9:12GMT).
Elsewhere, Brent oil for January delivery on the ICE Futures Exchange in London rose 23 cents, or 0.38%, to $60.36 a barrel.
Monday’s mixed move was a continuation of a rally at the end of last week that pushed Brent above the $60 mark, spurred by speculation that the Organization of the Petroleum Exporting Countries (OPEC) will agree to extend a deal to cut levels of production in order to rebalance the market.
The original agreement, struck nearly a year ago between OPEC and 10 other non-OPEC countries led by Russia, was to cut production by 1.8 million barrels a day for six months. The agreement was then extended in May of this year for a period of nine months until March 2018 in a bid to reduce global oil inventories and support oil prices.
Earlier in the week, Saudi Arabian Crown Prince Mohammed bin Salman indicated that the top oil exporter needed to extend production cuts in order to stabilize markets, suggesting an agreement for another nine month extension through the end of next year.
Russian President Vladimir Putin also said in Moscow earlier this month that November was too early to make a decision, but, at the same time, added that he doesn’t rule out an extension to the end of 2018.
On Friday, OPEC’s Secretary General Mohammad Barkindo declared that “OPEC welcomes the clear guidance from the crown prince of Saudi Arabia on the need to achieve stable oil markets and sustain it beyond the first quarter of 2018.”
“Together with the statement expressed by President Putin this clears the fog on the way to (the cartel’s next meeting in) Vienna on November 30,” he added in comments to Reuters.
Baker Hughes said Friday that its weekly count of oil rigs operating in the U.S. rose by one to 737, snapping three consecutive weeks of declines and bouncing off its lowest level since June seen in the prior week.
The oilfield services provider’s weekly rig count is an important barometer for the drilling industry and serves as a proxy for domestic oil production.
Elsewhere on Nymex, gasoline futures for December delivery edged forward 0.07% at $1.7186 a gallon by 5:13AM ET (9:13GMT), while December heating oil gained 0.29% to $1.8716 a gallon.
Natural gas futures for December delivery traded down 0.34% to $2.794 per million British thermal units.