Oil traded near $57 a barrel as OPEC boosted its projections for demand while the group’s top official signaled that producers should continue to curb output.
Futures were little changed in New York. Output cuts are the “only viable option” to rebalance a global market still contending with excess supply, OPEC Secretary-General Mohammad Barkindo said in Abu Dhabi on Monday. The group also increased its forecast for its own crude in 2018, signaling global inventories could drop further if OPEC and its allies continue to keep supplies restrained.
Oil has climbed about 20 percent since the start of September as global supplies tighten and speculation mounts that the Organization of Petroleum Exporting Countries will extend output curbs past the end of March. Prices have also been boosted by internal upheaval in Saudi Arabia, OPEC’s biggest member, and escalating tensions with its rival and fellow producer Iran. An oil pipeline between Saudi Arabia and Bahrain halted briefly over the weekend following an attack.
“Political developments in Saudi Arabia sent bullish ripples across the energy complex,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London.
West Texas Intermediate for December delivery traded at $56.81 a barrel on the New York Mercantile Exchange, up 7 cents, at 1:38 p.m. London time, after climbing 0.5 percent earlier. Total volume traded was about 13 percent below the 100-day average. Prices capped a fifth weekly gain last week, the longest run since October 2016.
Brent for January settlement fell 5 cents to $63.47 a barrel on the London-based ICE Futures Europe exchange, after rising 2.3 percent last week. The global benchmark crude traded at a premium of $6.46 to January WTI.
OPEC raised estimates for the amount of crude it will need to pump next year by 400,000 barrels a day to 33.4 million a day, according to a monthly report from the group.
Saudi Arabia said it will boost security at its oil facilities after Bahrain blamed Iran for a fire at a pipeline that connects the two Arab allies. Iran denied that it was involved. The pipeline resumed pumping later in the day after a brief halt.
The pipeline attack “is a dangerous Iranian escalation that aims to scare citizens and hurt the global oil industry,” Bahrain’s Foreign Minister Khalid Al-Khalifa said on Twitter. Iran responded by saying the Bahrainis “need to know that the era for lies and childish finger-pointing is over,” the Islamic Republic News Agency reported Sunday, citing a foreign ministry spokesman.
Hedge funds raised their Brent net-long positions by 2.4 percent to a record 543,069 contracts in the week ended Nov. 7, according to data from ICE Futures Europe. Official selling prices for December sales of flagship crudes pumped by Iraq, Iran and Kuwait show they are undercutting Saudi Arabia’s pricing for refiners in Asia. Abu Dhabi National Oil Co. kick-started a round of privatizations in the Middle East oil industry, saying it will sell shares in its retail fuel stations unit and list them on the local stock exchange.