Crude prices jump towards data on decline in US stocks

By Azernews

By Sara Israfilbayova

Oil prices continue to rise during trading on Wednesday and are trading close to the maximum for two years after the growth on the eve of data on reduction of fuel stocks in the U.S.

In addition, the participants of the oil market are preparing for the upcoming meeting of the representatives of the OPEC + states, which will be held on November 30 in Vienna and where the issue of extending the term of the current agreement on limiting oil production will be discussed.

“There is growing consensus that OPEC will extend their production cut deal at the end of the month. This confidence along with the current geopolitical environment has kept ICE Brent trading firmly above $60 per barrel,” Dutch bank ING said.

U.S. West Texas Intermediate (WTI) crude futures are at $57.83 per barrel up $1, or 1.8 percent from their last settlement, while Brent crude futures are at $63.20 per barrel, up 63 cents, or 1 percent, according to Reuters.

As the American Petroleum Institute (API) reported on November 21, oil reserves in the U.S. fell by 6.36 million barrels last week. Official data from the U.S. Energy Department will be released on November 22, and experts expect that they will indicate a decrease in stocks by 2.2 million barrels.

Moreover, Saudi Arabia reduced oil exports by 2.4 percent in September, as compared with the previous month and increased production by 0.2 percent, according to the Joint Organization Data Initiative (JODI).

The volume of exports decreased to 6.549 million barrels per day, as compared to 6.708 million barrels per day in August. At the same time, the indicator fell by 16.2 percent, as compared to September 2016.

Meanwhile, Colombia was invited to participate in the meeting of OPEC + but refused to participate, Bloomberg reported.

OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.

Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.

OPEC and its partners decided to extend its production cuts till March 2018 in Vienna on May 25, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.