Oil prices climb after relese of API data

By Azernews

By Nigar Abbasova

World oil prices turned to a growth on September 28, supported by an unexpectedly sharp drop in U.S. crude reserves.

Brent crude rose by 24 cents to trade at $46.21per barrel, while WTI crude recorded an increase of 11 cents to stand at $44.79 a barrel, Reuters reported.  Azeri Light crude faced a drop of 13 cents and stood at $48.08.

American Petroleum Institute’s (API) weekly crude stocks data, revealed a surprising fall of 752,000 barrels down to 506.4 million barrels in the week, which ended on September 23. Traders will now keep an eye on the U.S. Energy Information Administration’s (EIA) official storage data, which is to be released in the short run.

Meanwhile, all eyes turned to the Algeria meeting. The ways to strengthen prices that have been depressed since 2014 amid a supply glut, as well as the possibility of output freeze, are to be discussed on the sidelines of the running Algeria forum.

 The deal is still “far”, as a number of producers said the meeting would have a “consultative character”.

Crude futures fell about 3 percent on September 27 after Iran rejected an offer from Saudi Arabia to limit its oil output in exchange for Riyadh’s cutting supply, dashing market hopes the two major OPEC producers would find a compromise to help ease a global glut of crude.

Iran’s Oil Minister Bijan Zanganeh earlier said the country is not ready to agree to oil output freeze. "It's not on our agenda to reach an agreement in two days. We need time for more consultation," he said, adding that Iran was investing to increase its output to pre-sanctions levels.

Venezuela’s Oil Minister Eulogio del Pino, whose country largely depends on oil revenues, warned that if oil exporting countries are unable to reach an agreement during the meeting in Algeria, prices could collapse to less than $20 per barrel.

OPEC’s Secretary General Mohammad Barkindo, however, made a more optimistic forecast, saying there is evidence to suggest that the oil market is now gradually realigning itself.

He said non-OPEC supply is expected to contract by 0.6 million barrels a day this year and oil demand growth is set to be 1.2 million barrels a day. The OPEC chief also said  demand is set to increase by around 17 million barrels a day between now and 2040 to reach the volume close to 110 million barrels a day.

The market is now pinning its hopes on OPEC's formal policy meeting scheduled for November 30 in Vienna, while Algeria discussions could provide the groundwork for an agreement.