Oil Steady Near $52 as Saudi Prince Backs Longer OPEC Cuts

October 26, 2017 by Grant Smith

(Bloomberg)

Oil steadied near $52 a barrel as Saudi Crown Prince Mohammed bin Salman backed the extension of OPEC production cuts beyond March 2018.

Futures were little changed in New York after falling 0.6 percent on Wednesday. Prince Mohammed said in an interview with Bloomberg News in Riyadh that “of course” he wanted to extend OPEC’s production cuts in 2018, making it all but certain the group and its allies will roll over the curbs at a meeting next month.

Oil is holding gains above $50 a barrel as speculation mounts that supply curbs by members of the Organization of Petroleum Exporting Countries and its allies including Russia will be prolonged when they meet in Vienna on Nov. 30. In Iraq, the state oil company is working with a Kurdish firm to resume pumping at two disputed fields after government troops recaptured them from Kurdish forces.

“There seems to be consensus of prolonging the OPEC deal through 2018,” said Michael Poulsen, an analyst at Global Risk Management Ltd.

West Texas Intermediate for December delivery was at $52.15 a barrel on the New York Mercantile Exchange, down 3 cents, at 12:40 p.m. London time. Total volume traded was about 45 percent below the 100-day average. Prices lost 29 cents to $52.18 on Wednesday.

Brent for December settlement fell 12 cents to $58.32 a barrel on the London-based ICE Futures Europe exchange, after gaining 11 cents on Wednesday. The global benchmark traded at a premium of $6.12 to WTI.

Oil-market news:

U.S. crude inventories climbed by 856,000 barrels last week while gasoline supplies lost 5.47 million, the first drop since mid-September, according to the Energy Information Administration. Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, fell by 237,000 barrels to 63.7 million last week, the first drop in nine weeks, the EIA said Wednesday. U.S. crude output rebounded to more than 9.5 million barrels a day as the impact from Tropical Storm Nate receded. Iraqi forces deployed heavy weapons, tanks and artillery near Mosul and are expected to launch a major attack on Peshmerga forces in Zumar and Rabia, the Kurdistan region’s security council said in a statement. Oil will stabilize $55 to $60 a barrel in the near term, according to Apollo Global Management LLC Chief Executive Officer Leon Black.