Oil rises as Russia and Opec draw up outline deal on cuts

US benchmark settled above $58 a barrel for the first time since mid-2015 this week

Oil advanced to a fresh two-year high as Opec and Russia were said to have crafted the outline of a deal to extend their oil production cuts to the end of next year.

Futures gained as much as 1.5 per cent in New York. After days of talks, Moscow and Riyadh now agree on the need to announce an additional period of cuts at the November 30 meeting, although both sides are still hammering out crucial details, according to people involved in the conversations.

The US benchmark settled above $58 (Dh213) a barrel for the first time since mid-2015 this week on heightened optimism the Organisation of Petroleum Exporting Countries and its allies will agree to prolong cuts at a November 30 meeting in Vienna. Prices are up more than 8 per cent in November, heading for a third monthly gain in what would be their longest winning streak since May last year.

“Hopes are high for Opec meeting,” said the Bob Minter, investment strategist at Aberdeen Asset Management Inc. “Opec will surely extend the programme of cuts — it’s hard to imagine that they’d let markets get this far ahead of themselves without any basis.” WTI for January delivery was at $58.87 a barrel on the New York Mercantile Exchange at 12:26pm in London, up 85 cents. The contract added $1.19 to $58.02 on Wednesday. There was no settlement Thursday because of the Thanksgiving holiday in the US and all transactions were to be booked yesterday.

Brent for January settlement climbed 23 cents to $63.78 a barrel on the London-based ICE Futures Europe exchange. Prices rose 23 cents to $63.55 on Thursday.