Oil extended gains from the highest close in more than two years on signs OPEC will agree to extend supply cuts when ministers meet in Vienna at the end of the month.
Futures rose as much as 0.9 percent in New York and are heading for a fourth weekly advance. Iraq, the second-biggest OPEC producer, backs extending the curbs for a further nine months, Oil Minister Jabbar al-Luaibi said in Baghdad. While ministers from Saudi Arabia and Kuwait said this week longer cuts are needed, a consensus on how long to prolong is yet to be decided.
Oil has advanced more than 15 percent since the beginning of September on signs that global supplies are tightening and the Organization of Petroleum Exporting Countries and allied producers may prolong their output agreement past the end of March. A decision this month on an extension is not certain, according to Russian Energy Minister Alexander Novak.
“I think it’s a done deal, the only issue to be discussed is that, do they extend it for six months or nine months,” Fereidun Fesharaki, founder and chairman of energy industry consultant FGE, said in a Bloomberg television interview. “The signals to the market are positive.”
West Texas Intermediate for December delivery climbed as much as 49 cents to $55.03 a barrel on the New York Mercantile Exchange and was at $54.70 as of 7:30 a.m. in London. Total volume traded was about 34 percent below the 100-day average. Prices on Thursday gained 24 cents to settle at $54.54, the highest close since July 2015, and are 1.5 percent higher this week.
Brent for January settlement added as much as 31 cents, or 0.5 percent, to $60.93 a barrel on the London-based ICE Futures Europe exchange. The contract rose 0.2 percent to $60.62 on Thursday. Front-month prices are up 0.5 percent this week. The global benchmark traded at a premium of $5.80 to January WTI.
Iraq backs any OPEC decision to help support prices, Al-Luaibi told reporters on Thursday. The group hasn’t discussed making deeper cuts, he said. Global stockpiles are declining and demand is increasing, but there’s still a significant inventory overhang in the market, Khalid Al-Falih, Saudi Arabia’s oil minister, said at the Asian Ministerial Energy Roundtable in Bangkok on Thursday.
President Nicolas Maduro said Venezuela will seek to restructure its debt after the state-owned oil company makes one more payment, blaming U.S. financial sanctions for making it impossible to find new financing. EOG Resources Inc. took the wraps off two new chunks of land in the Permian and in Oklahoma that tack on an estimated 750 million barrels of oil to its portfolio.