Oil extended gains near $46 a barrel after its biggest surge in seven months as OPEC boosted efforts to finalize a deal to cut production agreed at a September meeting in Algiers.
Futures rose 0.7 percent in New York after advancing 5.8 percent on Tuesday, rebounding from the lowest close in eight weeks. OPEC Secretary-General Mohammed Barkindo will tour member states after meeting with Saudi Arabia’s Minister of Energy and Industry Khalid Al-Falih in London, according to a person familiar with the talks. Russia plans informal consultations with members from the Organization of Petroleum Exporting Countries in Doha from this week.
Oil had retreated for almost four weeks amid skepticism about the ability of OPEC to implement a deal at its Nov. 30 meeting. The group is seeking to trim output for the first time in eight years as Iran boosts production and Iraq seeks an exemption because of war with Islamic militants. Prices will probably remain around current levels if OPEC fails to cut, according to BP Plc Chief Executive Officer Bob Dudley.
“The Saudis are probably aware that they are going to have to make a significant gesture to get a price response, so there could be announced cuts,” said Michael McCarthy, chief market strategist in Sydney at CMC Markets. “We’ve had a very significant move down from near $52 to below $43, so it’s no surprise to see it bounce after that sort of decline.”
West Texas Intermediate for December delivery was at $46.11 a barrel on the New York Mercantile Exchange, up 30 cents, at 2:09 p.m. in Hong Kong. The contract gained $2.49 to $45.81 on Tuesday, the biggest advance since April 8. Total volume traded was about 41 percent above the 100-day average.
OPEC Diplomacy
Brent for January settlement was 38 cents higher at $47.33 a barrel on the London-based ICE Futures Europe exchange. The contract climbed $2.52, or 5.7 percent, to $46.95 on Tuesday. The global benchmark traded at a premium of 59 cents to January WTI.
See also: OPEC has ‘all hands on deck’ as Vienna meeting nears
OPEC’s Barkindo will travel to Caracas, Quito and Tehran for talks in the coming days, said two people familiar with the matter, who asked not to be identified because the information isn’t public. Russia will meet with some members at a forum in Doha on Nov. 17-18, the Energy Ministry in Moscow said in a statement Tuesday. Saudi Arabia will join the talks, said an OPEC delegate.
Oil-market news:
U.S. crude stockpiles expanded by 3.65 million barrels last week, the industry-funded American Petroleum Institute was said to report Tuesday. Government data Wednesday is forecast to show supplies rose by 1 million barrels. U.S. gasoline exports have climbed above imports for three consecutive weeks as recurring pipeline outages and higher production levels by refiners caused Gulf Coast inventories to grow.
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