Crude makes shaky gains

Kuwait Times - - BUSINESS -

LON­DON:

Oil prices were edg­ing higher for a sec­ond ses­sion yes­ter­day on hopes that non-OPEC pro­duc­ers meet­ing in Vi­enna would agree to cut out­put to bol­ster the group’s own agree­ment to limit pro­duc­tion. Still, a strong US dol­lar sapped some of the price strength, and both bench­marks re­mained roughly 2 per­cent be­low the highs reached just af­ter the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries an­nounced plans to cut pro­duc­tion late last month, and were on track to close the week with small losses.

To­day, oil min­is­ters from OPEC coun­tries will meet nonOPEC pro­duc­ers in Vi­enna to seek help in curb­ing a global glut. Brent crude for Fe­bru­ary de­liv­ery was up 5 cents at $53.94 a bar­rel by 1257 GMT, af­ter trad­ing as high as $54.46 and rising 1.7 per­cent on Thurs­day. The con­tract hit its high­est since July 2015 at $55.33 on Mon­day. US crude for Jan­uary de­liv­ery was up 22 cents at $51.06 a bar­rel af­ter trad­ing as high as $51.50.

Gains in the US dol­lar in­dex ver­sus a bas­ket of cur­ren­cies, which makes oil more ex­pen­sive to many of the world’s buy­ers, helped pull prices back from the highs reached ear­lier in the day. Rus­sia has said it would cut 300,000 bar­rels per day, mean­ing other non-OPEC pro­duc­ers com­bined would need to pledge the same amount to lower out­put by the 600,000 bpd OPEC wants. Rus­sia’s No. 2 oil pro­ducer Lukoil said yes­ter­day it was ready to take part in the out­put cut com­mit­ment.

Azer­bai­jan has said it will come to the Aus­trian capital with pro­pos­als for its own re­duc­tion, while Kaza­khstan’s en­ergy min­is­ter said they may of­fer to freeze out­put at last month’s level. Still, ques­tions re­mained over such out­put plans. “The mar­ket wants to find an ex­cuse to move higher and is there­fore in­clined to be­lieve,” Com­merzbank an­a­lyst Eu­gen Wein­berg told the Reuters Global Oil Fo­rum. “It’s ques­tion­able whether those be­liefs are sus­tain­able.”

Wein­berg said “so many ques­tions re­main” on the im­ple­men­ta­tion of non-OPEC cuts that the plan could fall to pieces. “Since the oil sec­tor in Rus­sia is only partly sta­te­owned the com­pa­nies will need to get com­pen­sated for any pro­duc­tion freeze/cuts,” he said, adding: “Talk­ing to the Russian com­pa­nies, there is no in­di­ca­tion or in­ten­tion to cut as well.” — Reuters

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.