Oil extended gains from the highest close in three weeks as Russia’s energy minister said that OPEC and other producers may meet to discuss output. Delegates from the group said no meeting has been planned.
Futures rose as much as 2.4 percent in New York, heading for a second weekly advance. Energy Minister Alexander Novak said the level of a proposed cut would be a matter for discussion, Interfax reported. At the moment, no talks have been scheduled with members of the Organization of Petroleum Exporting Countries, according to four delegates. Iraq said earlier in the week that Saudi Arabia and Russia were more flexible about cooperating to reduce output.
“If Saudi Arabia and Russia did come to any joint agreement on cutting back supply, it would only be making room in the market for Iran to take up that space,” Angus Nicholson, an analyst at IG Ltd. in Melbourne, said by phone. “These rallies are going to be quite ephemeral and unlikely to last.”
Oil has pared its drop this year to about 9 percent after earlier plunging to a 12-year low as volatility in global markets adds to concern over brimming U.S. stockpiles and possibly increased exports from Iran after the removal of sanctions. The head of OPEC this week called on producers outside the group to assist in reducing the global oversupply, signaling once again its members won’t make output cuts alone.
West Texas Intermediate for March delivery gained as much as 81 cents to $34.03 a barrel on the New York Mercantile Exchange and was at $33.98 at 2:16 p.m. in Hong Kong. The contract climbed 92 cents to $33.22 on Thursday, the highest close since Jan. 7. Total volume traded was at about 30 percent above the 100-day average. Prices are up 5.5 percent this week.
Brent for March settlement, which expires Friday, rose as much as 77 cents, or 2.3 percent, to $34.66 a barrel on the London-based ICE Futures Europe exchange. Prices are up 7.7 percent this week. The European benchmark crude was at a premium of 76 cents to WTI. The more-active April contract climbed 81 cents to $35.61.
Energy companies led gains on the MSCI AC Asia Pacific Index. Australian oil and gas producer Woodside Petroleum Ltd. rose as much as 6 percent in Sydney, while PetroChina Co. added 4.4 percent in Hong Kong.
Four OPEC representatives, who asked not to be identified, said they hadn’t heard of any plan for talks. One Gulf member said de facto leader Saudi Arabia had no proposal to trim production by 5 percent, after Interfax reported Thursday the country had suggested such a cut at previous OPEC meetings, citing Novak. The minister said Russia would be willing to discuss output with OPEC, according to the news service.
Saudi Arabia is keen to defend market share and Russia’s inability to cut production in winter months makes coordination difficult. Until this week, Russia had repeatedly stated its goal of keeping oil production stable even as prices tumble. The two countries’ opposing views on Syria, where Russia is President Bashar Al-Assad’s closest ally and Saudi Arabia seeks his removal, presents another diplomatic obstacle.
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