Oil briefly brushes past $59

calgary — Oil briefly surpassed $59 a barrel in New York for the first time in two years as Opec and Russia were said to have crafted the outline of a deal to extend their oil production cuts.

Futures closed 1.6 per cent higher on Friday, just 10 cents below a fresh two-year high.

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 sources. Moscow had been hesitating over the need for an extension because the current deal doesn’t expire until the end of March.

“Russia has been scared of higher prices and has been sort of unwilling to commit to a nine month” extension of cuts, Sam Alderson, analyst at Energy Aspects, said from London. Oil market strength comes from “the more positive signs from Russia.”

The US benchmark last week has traded at levels last reached in mid2015 on heightened optimism that the Organisation of Petroleum Exporting Countries and its allies will agree to prolong cuts until the end of next year. Prices are up more than eight per cent in November, heading for a third monthly gain in what would be the longest winning streak since May last year.

“Everyone is in favour of extending the deal to reach its final goals, Russia also supports these proposals,” Energy Minister Alexander Novak told RBC TV.

West Texas Intermediate for January delivery rose by 93 cents to $58.95 a barrel on the New York Mercantile Exchange, after touching $59.05. Brent for January settlement climbed 31 cents to $63.86 a barrel on the Londonbased ICE Futures Europe exchange. — Bloomberg