Oil prices hit high­est since Oct on hopes of OPEC out­put deal

Kuwait Times - - BUSINESS -

Oil prices rose yes­ter­day to their high­est this month as a grow­ing con­sen­sus emerged in the mar­ket that OPEC would over­come in­ter­nal dis­putes and skep­ti­cism to strike a deal that ma­te­ri­ally re­duces crude out­put. But some warned a fail­ure by the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries to reach agree­ment at a Nov. 30 meet­ing, or ef­fec­tively im­ple­ment it, would send prices crash­ing as a two-year glut of crude re­mained un­abated.

Brent crude oil fu­tures were up 85 cents a bar­rel at $49.75 by 1000 GMT, hav­ing ear­lier risen $1 in a push against the $50 mark for the first time since the end of Oc­to­ber. US West Texas In­ter­me­di­ate (WTI) crude fu­tures were up 68 cents, or 1.4 per­cent, at $48.92 a bar­rel. Prices were boosted by com­ments from a Nige­rian of­fi­cial at­tend­ing an OPEC tech­ni­cal meet­ing, which is try­ing to ham­mer out de­tails of a deal, that it was likely all coun­tries would be “on board.”

OPEC is try­ing to bring its 14 mem­ber states, in­clud­ing re­gional foes Saudi Ara­bia and Iran, and non-OPEC pro­ducer Rus­sia to agree on a co­or­di­nated cut to prop up the mar­ket by bring­ing pro­duc­tion into line with con­sump­tion. The or­ga­ni­za­tion had said at the end of Septem­ber it aimed to cut pro­duc­tion to be­tween 32.5 mil­lion and 33 mil­lion bar­rels per day com­pared to its re­cent record out­put of around 33.8 mil­lion bpd.

Since then, doubts weighed over whether Saudi Ara­bia and Iran could put their geopo­lit­i­cal dis­putes aside and whether coun­tries whose fi­nances are in dire straits due to low oil prices would re­sist the urge to pump crude at high rates. An­a­lysts at RBC said they be­lieved a deal would be reached. “Our view is pri­mar­ily based on the be­lief that the sin­gle most im­por­tant coun­try in OPEC, Saudi Ara­bia, wants it, and that the abil­ity of a num­ber of sus­pected cheaters to cheat is con­strained,” they said in a note. While a ceil­ing for over­all OPEC pro­duc­tion may be agreed by Nov. 30, it is un­clear whether clear quo­tas per mem­ber state would be set. Some coun­tries, such as Nige­ria, Iraq, Libya and Iran, ar­gue they should be ex­empt be­cause their out­put has been hit by con­flict or sanc­tions.

COLOMBO: Sri Lankans pas­sen­gers hold on to door han­dles as they travel in a full car­riage of a train in Colombo yes­ter­day. Due to its af­ford­abil­ity, train travel is a pop­u­lar mode of trans­port in this na­tion of 20 mil­lion peo­ple.

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