Oil gains on pro­duc­tion cut prospects

The Pak Banker - - MARKETS/SPORTS -

Oil rose on Fri­day, end­ing the week sharply higher, on ex­pec­ta­tions of a deal by ma­jor ex­porters to cut pro­duc­tion to re­duce the mas­sive over-sup­ply that has sent prices tum­bling.

Brent fu­tures LCOc1 have jumped more than a quar­ter since hit­ting an intra-day low of $27.10 a bar­rel on Jan. 20. It hit an in­tra­day high on Thurs­day of $35.84.Brent had risen 18 cents to $34.07 a bar­rel by 1020 GMT (5:20 a.m. ET), af­ter end­ing up 79 cents, or 2.4 per­cent on Thurs­day, and is head­ing for its fourth straight ses­sion of gains.

US crude CLc1 climbed 26 cents to $33.48 a bar­rel, hav­ing set­tled up 92 cents, or 2.9 per­cent, at $33.22 on Thurs­day. U.S. crude is also set for al­most 6 per­cent weekly gain.

Rus­sia's Deputy Prime Min­is­ter Arkady Dvorkovich said on Fri­day Rus­sian out­put could de­cline as a re­sult of lower in­vest­ment, but the state would not in­ter­vene to bal­ance the mar­ket. The com­ment ap­peared to be pour­ing cold wa­ter on the idea of joint OPEC and non-OPEC pro­duc­tion cuts men­tioned by Rus­sian En­ergy Min­is­ter Alexan­der No­vak on Thurs­day.

How­ever many an­a­lysts think there is still a good chance of a deal. "As the head­lines fly it is dif­fi­cult to be ab­so­lutely sure about each word used but we don't read 'no meet­ing sched­uled yet' the same as 'no meet­ing sched­uled'," Olivier Jakob, an­a­lyst at Petro­ma­trix in Zug, Switzer­land said.

"The 'yet' is not nec­es­sar­ily a 'nyet' and we can there­fore con­tinue to spec­u­late about a pos­si­ble meet­ing." Brent fu­tures ral­lied as much as 8.2 per­cent af­ter Rus­sia said on Thurs­day that OPEC's largest pro­ducer Saudi Ara­bia had pro­posed oil pro­duc­tion cuts of up to 5 per­cent. No date yet for OPEC, non-OPEC meet­ing, min­is­ters con­sult­ing: del­e­gate. "While we view this out­come as un­likely, a 5 per­cent pro­duc­tion cut by just Saudi Ara­bia and Rus­sia would be suf­fi­cient to bring the mar­ket close to bal­ance," Jef­feries said in a re­search note on Fri­day, re­fer­ring to Rus­sia's com­ment.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.