Oil rose slightly after an OPEC gathering concluded with no decision on an extension or deepening of supply cuts.
Futures toggled between small gains and losses in New York on Friday, ending the session 0.2 percent higher.
As an OPEC committee meeting wrapped up, Russian Minister of Energy Alexander Novak said the cartel and allied producers can wait until at least January next year to consider prolonging the output limits.
Photo: Bloomberg
Kuwaiti Minister of Oil Essam al-Marzooq said after the meeting that “the process is working fine so far.”
“People feel like the market generally is rebalancing,” Michael Lynch, president of Strategic Energy & Economic Research Inc in Winchester, Massachusetts, said by telephone. “The news out of OPEC is sort of bland, but these days, bland is good.”
Oil is on track for only its third monthly gain for this year as supply cuts by OPEC and partners, such as Russia, showed signs of whittling the worldwide crude glut.
Nigeria, which along with Libya is exempt from the supply-reduction deal, reiterated that it would cap output once its production stabilizes at about 1.8 million barrels a day.
The next key event is to be a Nov. 30 meeting of OPEC ministers.
“It’s going to come down to the meeting,” Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors LLC, said in a telephone interview.
Traders will be more interested in deeper production cuts than an extension of the existing constraints, he said.
West Texas Intermediate (WTI) for November delivery rose US$0.11 to settle at US$50.66 a barrel on the New York Mercantile Exchange. Total volume traded was about 40 percent below the 100-day average. Prices posted a 1.5 percent weekly advance.
Brent crude for November settlement added US$0.43 to end the session at US$56.86 a barrel on the London-based ICE Futures Europe exchange. The contract is up 2.2 percent for the week.
The global benchmark crude traded at a premium of US$6.20 to WTI.
Brent futures for near-term delivery are trading at a marked premium to longer-term contracts, a pattern known as backwardation that shows demand is exceeding supplies.
Oil inventories in developed economies have dropped by 170 million barrels since January and backwardation in prices demonstrates stockpiles are shrinking and demand is rising, al-Marzooq said before the meeting.
There is no reason for deeper cuts, he told reporters in Vienna.
Meanwhile, OPEC Secretary-General Mohammad Barkindo said it is critical for the group to maintain focus and fully implement agreed curbs.
“Overall, the market viewed the meeting as a non-event,” Phil Flynn, senior market analyst at Price Futures Group Inc in Chicago, said by telephone. “At the end of the day, even though they raised hopes, there was nothing solid.”
Oil market news:
‧ The US oil rig count fell for a third straight week, down five rigs to 744, the lowest level since June, Baker Hughes Inc data showed.
‧ Hedge funds’ long positions in Brent crude futures and options were 533,414 lots in the week to Tuesday versus 68,434 shorts, ICE Futures Europe data showed.
‧ Billionaire oilman Harold Hamm said the US government was way too optimistic with its prediction of more than 1 million new barrels in daily US production and the error is “distorting” global crude prices.
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