Oil prices rise 2% ahead of producers’ meeting

london — Oil prices edged up for a second day on Friday on expectations that a weekend meeting of the world’s top oil producers would demonstrate compliance to a global output cut deal, but a larger than expected rise in weekly US crude stocks capped gains.

International benchmark Brent crude prices were up $1.30, or 2.4 per cent, at $55.46 a barrel at 1419 GMT.

US West Texas Intermediate (WTI) crude oil futures were trading up $1.25, also 2.4 per cent, at $52.62 a barrel.

“Prices were pushed down a bit too far and hopes will rise that the Opec/non-Opec meeting this weekend will show that these producers actually give some proof that they cut production,” said Hans van Cleef, senior energy economist at ABN Amro.

A weekend meeting in Vienna of members of the Organisation of the Petroleum Exporting Countries and some producers outside of the group, including Russia, will establish a compliance mechanism to verify producers are sticking to a deal to reduce output by 1.8 million barrels per day (bpd), Opec’s secretary general told Reuters.

Saudi Arabia’s energy minister said on Friday that 1.5 million bpd had already been taken out of the market, adding to signs that the oil market is rebalancing.

However, higher than expected crude oil and gasoline stocks in the US capped gains.

US crude inventories rose unexpectedly last week as refineries sharply slowed production, while gasoline stocks soared amid weak demand, the Energy Information Administration said on Thursday. — Reuters