Oil Rises Near $51 on Report Russia Willing to Join OPEC Curbs

Oil rose to trade near $51 a barrel in New York, erasing an earlier loss, after a report that Russia accepts the need to cut production in conjunction with OPEC.

All eyes are on this weekend’s G-20 summit in Argentina, where Russia’s Vladimir Putin and Saudi Arabia’s Mohammed bin Salman are likely to discuss how to coordinate oil policy. The nations are in talks over the timing of any reduction in supply, Reuters reported Thursday, a week before producers are due to meet in Vienna to discuss the market and a possible cut in 2019.

“It’s all about bargaining, and producers aiming for the best deal possible,” said Giovanni Staunovo, a commodities analyst at UBS Group AG. “There are other producers more desperate than Russia for an agreement.”

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West Texas Intermediate for January added as much as 2.4 percent in New York, and traded up 1.4 percent at $50.99 a barrel as of 8:58 a.m. local time. Prices earlier fell to the lowest since October 2017. Volumes were about double the 100-day average.

Brent for January settlement, which expires Friday, advanced 75 cents to $59.51 a barrel on London’s ICE Futures Europe exchange. The global benchmark traded at an $8.46 premium to WTI. The more-active February contract rose 78 cents to $59.87 a barrel.

See also: Resilient Russian Oil Companies Give Putin Leverage With OPEC

Putin praised Saudi Crown Prince Mohammed on Wednesday and said Moscow is ready to cooperate further. He also said crude around $60 a barrel is “balanced and fair” and well above the level needed to keep his government’s budget in surplus. By contrast, Saudi Arabia needs oil at more than $80 a barrel to balance its budget.

In the U.S., crude stockpiles rose by 3.58 million barrels last week in the longest run of gains since November 2015, according to the Energy Information Administration. The increase was greater than the 1 million-barrel gain predicted in a Bloomberg survey, overshadowing a surprise draw in gasoline inventories.

Oil-market news WTI’s  14-day Relative Strength Index indicates that the U.S. marker has traded in oversold territory every day so far this month. The entire Brent futures curve has slumped into a bearish  contango structure, indicating oversupply.  Shale explorers will probably cut spending budgets next year for the first time since the last price crash as crude spirals down again, analysts said. Alberta is working to buy rail cars to help ship more crude as pipeline bottlenecks have the oil-rich province grappling with historic low prices.