Oil capped the first weekly gain since the middle of last month after OPEC member Algeria said the group’s meeting with Russia gave it confidence a deal can be reached to rebalance global markets.
Algerian Energy Minister Noureddine Boutarfa said he is more optimistic of clinching an agreement after discussions between OPEC and Russia in Doha.
Russian Energy Minister Alexander Novak said a consensus is emerging and that his country is considering an output freeze of six months.
Prices fell earlier as the US dollar rallied and US explorers added the most oil rigs in 16 months.
“The expectation is that OPEC will come up with something,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St Louis, which oversees US$5.6 billion. “The talk of a cut is what’s buoyed the market the last couple of months.”
Oil has retreated since reaching this year’s high last month near US$52 a barrel amid skepticism about the ability of OPEC to implement the deal agreed on Sept. 28 in Algiers.
The group is seeking to trim output for the first time in eight years, a plan complicated by Iran’s commitment to boost production and Iraq’s request for an exemption to help fund its war with extremist militants. Neither country sent ministers to the Doha talks.
West Texas Intermediate (WTI) for December delivery rose US$0.27 to close at US$45.69 a barrel on the New York Mercantile Exchange. Prices advanced 5.3 percent this week after falling the previous three.
Brent for January settlement increased US$0.37, or 0.8 percent, to US$46.86 a barrel on the ICE Futures Europe exchange in London. The global benchmark crude rose 4.7 percent this week.
Brent closed at a US$0.50 premium to January WTI.
Rigs targeting crude in the US rose by 19 to 471 this week, the highest level since January, Baker Hughes Inc said on its Web site on Friday.
While Saudi Arabian Energy Minister Khalid al-Falih told al-Arabiya television that he is optimistic a deal will be reached on Wednesday next week, only seven of 20 analysts surveyed by Bloomberg this week expect OPEC to set production targets for its members needed to make an agreement work.
OPEC agreed in Algiers to reduce collective output to 32.5 million to 33 million barrels a day and has been trying to persuade other suppliers to join the cuts, notably Russia.
Trimming supply to the lower end of that range would speed up recovery, al-Falih said.
Oil market news:
‧ Drillers burned by a two-year slump in crude prices are slowing exploration of deep-water prospects off the coast of Africa, undermining a key driver of supply growth on the continent.
‧ Kuwait renewed a contract to supply Egypt with crude oil for the next three years, according to a senior Kuwaiti government official.
‧ Nigeria reached a US$5.1 billion settlement to reimburse foreign oil companies including Exxon Mobil Corp and Royal Dutch Shell PLC for past operating costs.
‧ Russian billionaire Mikhail Gutseriev’s initial public offering of as much as 20 percent of Russneft PJSC might give the oil producer a valuation as high as 176 billion rubles (US$2.7 billion).
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