Oil climbed as Iraq’s oil minister said it pledged to co-operate with the Organization of the Petroleum Exporting Countries (Opec) to reach an agreement this week that’s acceptable to all members.
Iraq’s oil minister, Jabbar al-Luaibi, said he is “optimistic” a deal will be reached at Opec’s summit in Vienna tomorrow.
Saudi Arabia previously said the producer group does not necessarily need to curb oil output, after pulling out of a scheduled meeting with non-members including Russia.
Opec is heading into the last stretch of negotiations before its November 30 meeting to adopt a supply deal that was first floated in September.
Oil prices whipsawed last week as various Opec members and Russia tried to position themselves ahead of a final accord to reduce production.
Ministers from Algeria and Venezuela headed to Moscow on Monday to get the biggest non-Opec producer on board.
“Oil prices have been buffeted by the various pronouncements from Opec producers. Iraq has come out today with a little more of a positive rhetoric,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas in London.
“What we have now is the usual poker game ahead of the meeting, where you have the various producers, each with their own agenda. In the end, they will sit down behind closed doors — they will have to show their cards.”
In the US, West Texas Intermediate crude for January delivery rose $1.19 to $47.25 a barrel on the New York Mercantile Exchange, while Brent for January settlement advanced $1.15, or 2.4%, to $48.39 a barrel on the London-based ICE Futures Europe exchange.
While Saudi Arabia has pushed to reverse Opec’s pump-at-will policy, energy minister Khalid Al-Falih had said the oil market would recover in 2017 even without cuts as consumption grows in countries such as the US.
Russia has so far resisted requests to join a cut, offering instead to freeze production at current levels.
Energy minister Alexander Novak has insisted that Opec reach an internal consensus on output curbs before Russia considers joining an accord.
Algerian energy minister Noureddine Boutarfa presented a proposal over the weekend to Iranian oil minister Bijan Namdar Zanganeh for an Opec cut of 1.1 million barrels a day.
If Opec fails to reach an output deal this week, oil prices may fall to the $20s, said Energy Aspects chief oil analyst Amrita Sen.
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