Oil set for weekly gain on rebalancing signs

Opec is said to expect a global glut will be gone a year from now

Oil is heading for the biggest weekly gain since mid-September as a drop in US crude stockpiles and near-record Chinese imports added to signs the global market is rebalancing.

Futures added 1.9 per cent in New York. China’s crude imports last month jumped to the second-highest on record, customs data show, while US government data on Thursday showed crude inventories fell by 2.75 million barrels last week. Opec is said to expect a global glut will be gone a year from now. President Donald Trump was expected yesterday to disavow a deal with Iran that helped revive its oil exports, while stopping short of abandoning it.

“Crude oil is starting the day watching the strong import data from China, and ending the day listening to Trump’s announcement of his new strategy towards Iran,” said Olivier Jakob, managing director of consultants Petromatrix GmbH in Zug, Switzerland.

Oil has rebounded from the biggest weekly loss since May on signs that output cuts led by the Organisation of Petroleum Exporting Countries are draining a surplus. Opec expects the effort to succeed by the end of the third quarter of next year, said people familiar with the group’s internal forecasts. The prediction assumes that production in Libya and Nigeria will remain at current levels and US shale output will expand by no more than 500,000 barrels a day next year, two people familiar with the matter said.

West Texas Intermediate for November delivery was at $51.56 a barrel on the New York Mercantile Exchange, up 97 cents, at 1.16pm in London. Total volume traded was in line with the 100-day average. Prices are up 4.6 per cent this week.

Brent for December settlement was at $57.35 a barrel on the London-based ICE Futures Europe exchange, up 2 per cent, or $1.10. Prices are up 3.2 per cent this week. The global benchmark crude traded at a premium of $5.54 to December WTI. Prices also rose amid tensions in Opec member Iraq between the central government and the country’s semi-autonomous Kurdish region.