Oil rebounds as Saudis dispel Russia’s qualms
new york/london — Oil ended the week on a rebound as Saudi Arabia moved to dissipate doubts that Russia is ready to extend output curbs.
Futures rose 2.6 per cent in New York on Friday after Saudi Arabia’s Energy Minister Khalid Al Falih said Opec should announce an extension of the cuts when it meets on November 30. But that wasn’t enough to completely erase losses from the past few days, when uncertainty over a deal and surging US production set the tone. Prices were 0.3 per cent lower for the week, snapping the longest streak of weekly gains in a year.
“Ahead of the Opec meeting, we’re going to see a little bit of volatility,” Gene McGillian, a market research manager at Tradition Energy in Stamford, Connecticut, said by phone. “Going forward, the market needs to keep seeing that the fundamental picture is continuing to tighten.”
Oil’s rally to the highest in more than two years last week faltered as Russia is said to be hesitant to commit to a decision on the cuts so soon, suggesting the Opec wait until closer to the deal’s expiration at the end of March. US crude output gained last week to the highest in more than three decades, according to government data. Adding to the tension, the International Energy Agency said milder-than-normal winter weather is putting a brake on demand growth.
West Texas Intermediate for December delivery settled $1.41 higher at $56.55 a barrel on the New York Mercantile Exchange.
Brent for January settlement closed 2.2 per cent higher at $62.72 a barrel on the Londonbased ICE Futures Europe exchange. Prices were down 1.3 per cent last week, the first weekly drop since the start of October. The global benchmark was at a premium of $6.01 to January WTI. — Bloomberg