Oil Rises Above $50 as Iraq Raises Prospect of More OPEC Action

(Bloomberg) 

Oil extended gains above $50 a barrel in New York as Iraq raised the prospect of OPEC taking further steps to clear a global supply glut.

West Texas Intermediate futures added 0.8 percent. Iraqi Oil Minister Jabbar al-Luaibi said there’s support in the Organization of Petroleum Exporting Countries to deepen output curbs by about 1 percent. Still, Iraq has failed to deliver the supply cuts it committed to under the current agreement. U.S. refiners are delaying scheduled maintenance as they resume operations after Hurricane Harvey, supporting demand for crude.

While oil has rebounded the past two weeks, prices have struggled to hold above $50 a barrel this year as rising U.S. output stifles supply curbs led by OPEC members and allies such as Russia. Caribbean islands still recovering from Irma are bracing for a third hurricane strike in two weeks, as Maria tracks toward the U.S. coast.

Iraq’s suggestion “has a minor influence on prices — if it would have come from Saudi Arabia, it would probably have had a bigger impact,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.

West Texas Intermediate for October delivery, which expires Wednesday, rose 38 cents to $50.29 a barrel on the New York Mercantile Exchange at 12:38 p.m. in London. Total volume traded was about 3 percent below the 100-day average. Prices closed at $49.91 on Monday after settling unchanged on Friday.

Brent for November settlement added 21 cents to $55.69 a barrel on the London-based ICE Futures Europe exchange. Prices fell 14 cents to $55.48 on Monday. The global benchmark traded at a premium of $5.02 to November WTI.

The largest U.S. refinery, operated by Motiva Enterprises LLC in Texas, is said to have pushed back work on a unit to April from September, while others churn out more fuel to take advantage of strong margins.

At least 13  refineries from Louisiana to Montana have delayed maintenance for weeks or months, according to company statements and people familiar with the situations. While some companies are making the most of better margins, others simply don’t have the personnel because workers were dispatched to help repair and restart storm-hit facilities along the Gulf of Mexico.

American crude stockpiles probably rose by 3 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report on Wednesday.

Oil-market news:

Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI crude and the nation’s biggest oil-storage hub, rose by 900,000 barrels last week, according to a forecast compiled by Bloomberg. Saudi Arabian crude shipments dropped in July to their lowest level in almost three years, according to information that the country submitted to the Joint Organisations Data Initiative. Saudi Aramco plans to expand its trading business by buying and selling non-Saudi crude as the world’s biggest exporter prepares for what could be a record initial public offering.