Oil heads for third weekly gain before OPEC meet

Hong Kong - Oil is heading for a third weekly gain before an OPEC-led committee meets in Vienna to discuss ongoing production curbs.

Front-month futures were little changed in New York, leaving them 1.2% higher this week. OPEC and its allies indicated that they’ll wait a bit longer to see if further action is required in their bid to clear a global oil glut. Progress made in rebalancing suggests that it’s in the group’s interest to wait before committing to an extension, according to Goldman Sachs.

Oil has advanced about 7% this month on forecasts for rising crude demand and as US Gulf Coast plants recover from Hurricane Harvey, which halted almost a quarter of the nation’s refining capacity.

Nine months into the supply agreement led by members of the Organisation of Petroleum Exporting Countries, implementation of the pledged production cuts remains high. Nigeria, which is currently exempt from making cuts, reiterated that it would accept a cap once output stabilises around 1.8 million barrels a day.

“Today’s meeting of the Joint Ministerial Monitoring Committee is lending buoyancy,” Commerzbank said in a note. “Although no binding promises to extend or expand the agreement can be expected, Nigeria - which like Libya had not signed up to the production cuts - is at least showing a willingness to come on board.”

West Texas Intermediate for November delivery was at $50.53 a barrel on the New York Mercantile Exchange, down 2 cents, at 10:44. Total volume traded was about 53% below the 100-day average. Prices advanced 5.1% last week, the biggest weekly gain since July.

Too soon

Brent for November settlement was at $56.36 a barrel on the London-based ICE Futures Europe exchange, down 7c. Prices are up 1.3% this week. The global benchmark crude traded at a premium of $5.82 to WTI.

While Kuwait’s Oil Minister Issam Almarzooq and his Russian counterpart Alexander Novak said it was too early to discuss extending the cuts, Algerian Energy Minister Mustapha Guitouni told his country’s state-run press service that they would talk about it.

Novak also said there was no formal proposal for a further 1% cut, which Iraq’s Oil Minister Jabbar Al-Luaibi had suggested on Tuesday that some members were considering.

Oil-market news:

• Global petroleum stockpiles will rise 300 000 barrels a day in 2018 after not growing at all this year, Societe Generale SA analysts including Mike Wittner said in an Oil Market Outlook presentation.

• OPEC shipments will decrease to 23.82 million barrels a day in the four weeks to October 7 versus the period to September 9, tanker-tracker Oil Movements said in a weekly report.

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