🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

Global oil prices rise on expected extension of output cuts

Published 30/10/2017, 08:15
© Reuters. A pump jack is seen at sunset outside Scheibenhard, near Strasbourg
LCO
-
CL
-

By Henning Gloystein

SINGAPORE (Reuters) - Oil markets rose on Monday, with Brent remaining above $60 per barrel on expectations that an OPEC-led production cut due to expire next March would be extended, although rising exports from Iraq kept a lid on prices.

Brent crude futures (LCOc1), the international benchmark for oil prices, were at $60.73 per barrel at 0802 GMT, 29 cents or 0.48 percent above their last settlement and near their highest level since July 2015. They have risen more than 36 percent since from 2017-lows marked in June.

U.S. West Texas Intermediate (WTI) crude futures (CLc1) were up 16 cents, or 0.3 percent, at $54.06 a barrel.

"With strong compliance to OPEC's production curbs already supporting prices, comments from the Saudi Arabian Crown Prince that suggested the production cut agreement should be extended added to gains," ANZ bank said.

The Organization of the Petroleum Exporting Countries (OPEC) plus Russia and nine other producers have agreed to hold back about 1.8 million barrels per day (bpd) to get rid of a supply glut.

The pact runs to March 2018, but Saudi Arabia and Russia, who are leading the effort, have both voiced their support to extend the agreement.

OPEC is scheduled to meet officially at its headquarters in Vienna, Austria, on Nov. 30.

Traders said that a 900,000 bpd export capacity increase from Iraq's southern ports to 4.6 million bpd, reported on Sunday, had prevented Brent from rising further.

Meanwhile, U.S. production is up by almost 13 percent since mid-2016, resulting in a steep WTI discount of $6.50 per barrel against Brent , making U.S. crude exports attractive.

Confidence in the oil market is evident in the way financial traders have positioned themselves.

Hedge funds and other money managers raised their bullish wagers on U.S. crude futures and options in the week to Oct. 24, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

The speculator group raised its combined futures and options position in New York and London by 15,041 contracts to 280,634 during the period.

Despite this, some analysts were cautious, pointing to technical chart indicators.

© Reuters. A pump jack is seen at sunset outside Scheibenhard, near Strasbourg

"We note that both contracts' (Brent and WTI) relative strength indices (RSI) are both approaching overbought levels. This may imply that crude has risen enough in the short term and some consolidation is required," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.