Oil near $52 as Saudi prince backs longer production cuts

Crude has held above $50 in New York for most of this month despite US output gains

Saudi Crown Prince Mohammed Bin Salman backed the extension of Opec output cuts beyond March 2018, helping oil hold above $52 a barrel.

Futures traded little changed in New York, with prices holding above $50 a barrel since early October. Prince Mohammed said in an interview with Bloomberg News in Riyadh that “of course” he wanted to extend Opec’s production cuts into 2018. His comments follow Russian President Vladimir Putin saying Russia is open to extending the deal with Opec to the end of next year. The latest US government data showed a jump in production.

“The Opec story is definitely supportive. You’ve got to say they have earned back the market’s respect. They have gained credibility by compliance,” Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago, said. Yet the bearish argument is that the “shale oil producers are going to raise production. There are still some doubts in the market.”

Oil has held above $50 a barrel in New York for most of this month amid expectations that the Organisation of Petroleum Exporting Countries and its allies including Russia will extend an output-reduction agreement at a meeting in Vienna on November 30. Meanwhile, Iraq resumed exports of crude from the disputed Kirkuk province through pipeline port of Ceyhan.

“There seems to be consensus of prolonging the Opec deal through 2018,” said Michael Poulsen, an analyst at Global Risk Management Ltd.

West Texas Intermediate a Kurdishoperated to Turkish for December delivery slipped 7 cents to $52.11 a barrel at 9:32am on the New York Mercantile Exchange. Total volume traded was about 42 per cent below the 100-day average.

Brent for December settlement fell 26 cents to $58.18.