Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil holds near two-month high on OPEC+ extension expectations

Published 11/22/2019, 05:43 AM
Updated 11/22/2019, 05:43 AM
© Reuters. FILE PHOTO:  An oil pump is seen just after sunset outside Saint-Fiacre

© Reuters. FILE PHOTO: An oil pump is seen just after sunset outside Saint-Fiacre

By Ahmad Ghaddar

LONDON (Reuters) - Oil prices held near two-month highs on Friday and were set for a third consecutive week of gains, boosted by expectations of an extension to OPEC+ production cuts although doubts over U.S. and China trade talks capped gains.

Brent crude futures (LCOc1) dropped 6 cents to $63.91 a barrel by 0908 GMT, while West Texas Intermediate (WTI) crude futures (CLc1) fell 21 cents to $58.37 per barrel.

Prices touched their highest since late September on Thursday after Reuters reported that the Organization of the Petroleum Exporting Countries (OPEC) and Russia are likely to extend existing production cuts by another three months to mid-2020 when they meet on Dec. 5 and 6.

The group will also emphasize the need for stricter compliance with the cuts from members like Iraq and Nigeria.

"A disciplined approach from Iraq and Nigeria should shave off another 300-400,000 barrels per day (bpd) from the group’s production level leading to a balanced market in the first half of 2020 and to a possible supply deficit in the second half of 2020," oil brokerage PVM said.

The current agreement is for a production cut of 1.2 million bpd until the end of March.

Uncertainty over whether the United States and China will be able to reach a partial trade deal that would lift some pressure on the global economy kept a lid on prices.

China has invited top U.S. trade negotiators for a new round of face-to-face talks in Beijing as efforts continue to strike at least a limited deal, the Wall Street Journal reported on Thursday citing unidentified sources.

"The key factor for the demand outlook for oil is the trade negotiation currently going on," said Michael McCarthy, chief market strategist at CMC Markets and Stockbroking in Sydney.

"With oil near the top of recent trading ranges it's no surprise to see a bit of selling pressure during the session today."

China's commerce ministry on Thursday said that it will strive to reach an initial agreement with the United States to end the long-running trade war but the completion of a so called phase one deal could slide into next year.

News that last week saw the biggest drawdown in three months for U.S. crude stock stockpiles at Cushing, Oklahoma also underpinned prices earlier this week. Cushing is the delivery point for WTI futures.

© Reuters. FILE PHOTO:  An oil pump is seen just after sunset outside Saint-Fiacre

Latest comments

we can see a bit of selling pressure in crude for the day
These guys obviously don't pay attention. Sounds like a salaryman
Garbage article! Oil is up to 59,60,65 soon!
oil ran up over 3usd. This is a pull back from the last 2 days. If down days r small then it is a normal retrace. It is not china this, china that.
The opposite happened during the trading day on Thursday. What were you watching??
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.