Oil extends surge as OPEC signals deal, supply threats mount

Oil closed Friday at its highest in more than two years for a second day as support grew for OPEC to prolong output cuts, while supply threats abounded.

Futures jumped 2 percent in New York, closing above $55 a barrel for the first time since July 2015. While Nigerian militants and Venezuela’s debt woes imperil crude output from two of the world’s chief suppliers, the overarching bullish factor remained the increasing prospects for an extension of the OPECled curbs to be decided as early as this month. In the U.S., oil rigs declined by the most in more than a year, and WTI surpassing Thursday’s intraday high also provided upward momentum later in the session.

OPEC has indicated “they are looking to extend the agreement through the end of 2018,” said Andrew Lebow, senior partner at Commodity Research Group. “We’ve made a new high and the fundamentals have finally improved.”

Oil has surged on signs that global inventories are shrinking and the Organization of the Petroleum Exporting Countries and allied producers may stick to their glut-killing accord beyond its March expiration. Saudi Arabia, Iraq and Kuwait — which together pump more than 50 percent of OPEC’s crude — signaled firm support for an extension that would forestall a re-emergence of the glut next year.

“OPEC chatter also sounds like both the Saudis and Kuwait are both game for extending the deal sooner rather than later,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by telephone.

West Texas Intermediate for December delivery advanced $1.10 to settle at $55.64 a barrel on the New York Mercantile Exchange and climbed for a fourth week.