Oil-price rally lives on as optimism builds for OPEC deal
Details of accord could emerge later Tuesday, says Nigerian delegate
Oil futures extended their advance to a third session Tuesday, as anticipation over a production cut at next week’s meeting of the Organization of the Petroleum Exporting Countries continued to build.
Light, sweet crude for January CLF7, +0.12% delivery rose 31 cents, or 0.6%, to $48.55 a barrel in the Globex electronic session of the New York Mercantile Exchange after earlier tapping $49.20. Brent crude LCOF7, +0.72% gained 30 cents, or 0.7%, to $49.23 a barrel after it hit $49.96 intraday.
Crude continued to march higher as a growing chorus of delegates from OPEC expressed optimism over the likelihood of a deal at their Nov. 30 in Vienna. Delegates are meeting this week to iron out differences ahead of the formal meeting, and several participants expressed optimism over their progress.
In fact, OPEC is likely to reach a consensus over the implementation of an output-cut accord later Tuesday, a Nigerian delegate said.
“We are discussing, we are not disagreeing,” said Mohamed Oun, a Libyan representative to the cartel on Monday.
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The reported progressive follows remarks over the weekend from OPEC representatives from Iraq and Iran. On Sunday, Iraq’s oil minister Jabbar al-Luaibi told The Wall Street Journal that his country planned to offer three proposals at the meetings this week without specifying what they contained.
“Growing optimism [that] key OPEC/non-OPEC producers will make progress to control supply and generate a deficit next year has gone a long way to rally global crude markets,” analysts at TD Securities wrote in a note to clients.
The cartel is looking to reach a deal at its Nov. 30 that would cut production to between 32.5 million and 33 million barrels a day, down from record levels of 33.83 million barrels a day of output in October.
Still, OPEC has long struggled to reach an accord at its meetings since prices began their collapse about two years ago. OPEC’s deadlock, and the elevated production among non-OPEC members like the U.S. have contributed to low prices.
In refined fuel markets, Nymex reformulated gasoline blendstock for December RBZ6, +1.17% — the benchmark gasoline contract—rose 135 points to $1.4100 a gallon, while December diesel traded at $1.5411, 166 points higher.
ICE gasoil for December changed hands at $449.75 a metric ton, up $2.75 from Monday’s settlement.