Oil gains on bid to resolve output plan

Opec chief to hold talks with Iraq, which is seeking an exemption from planned cuts

Oil climbed with the secretary-general of the Organisation of Petroleum Exporting Countries (Opec) set to visit Baghdad yesterday for talks aimed at resolving a deal on output after Iraq said it should be exempt from planned cuts.

Futures rose as much as 0.8 per cent in New York after falling 0.7 per cent on Monday.

Mohammad Barkindo will meet with Iraq’s prime minister and oil minister, according to people familiar with the matter, after Opec’s secondbiggest producer said Sunday it should be excluded due to conflict with Daesh (self-proclaimed Islamic State of Iraq and the Levant) militants.

US crude stockpiles rose last week, a Bloomberg survey shows before government data today. West Texas Intermediate for December delivery was at $50.88 a barrel on the New York Mercantile Exchange, up 36 cents, at 9.34am in London. Prices slid 33 cents to close at $50.52 (Dh185.56) on Monday. Total volume traded was about 31 per cent below the 100-day average.

Brent for December settlement was 32 cents higher at $51.78 a barrel on the London-based ICE Futures Europe exchange. The contract dropped 32 cents, or 0.6 per cent, to $51.46 on Monday. The global benchmark crude was at a premium of 89 cents to WTI.

“The focus stays with Opec secretary-general’s efforts to get as many on board to cut production as possible,” said Ole Sloth Hansen, head of commodity strategy at Denmark’s Saxo Bank. “The market will play this with continued scepticism but as long as negotiations are ongoing the selling appetite seems pretty low.”

Iraq can accept a decision to freeze output based on an “actual” output level of more than 4.7 million barrels a day rather than the lower figure the group uses from secondary sources, Oil Ministry spokesman Asim Jihad said yesterday.