By Azernews

By Sara Israfilbayova

World oil prices rise on Monday, as investors are confident that Saudi Arabia will continue to pursue a course to reduce oil production, especially against the backdrop of the IPO of state-owned oil company Saudi Aramco, scheduled for 2018.

Initial public offering (IPO) or stock market launch is a type of public offering in which shares of a company usually are sold to institutional investors that in turn, sell to the general public, on a securities exchange, for the first time. Through this process, a privately held company transforms into a public company. 

Global benchmark Brent jumped by 0.14 percent to $55.7 per barrel, while WTI (West Texas Intermediate) rose by 0.18 percent to $49.38 per barrel, RIA Novosti reported.

Based on the results of the Russian-Saudi investment forum held on October 5 in Moscow, Russian Energy Minister Alexander Novak stressed that the positions of Russia and Saudi Arabia on the OPEC + deal are similar: the agreements will be prolonged if the oil market is not balanced.

Saudi Arabian Energy Minister Khalid A. Al-Falih previously also confirmed plans to conduct an IPO of the shares of the national oil giant Saudi Aramco in the second half of 2018.

During the IPO, the company plans to attract about $100 billion by selling about 5 percent of the shares. However, Saudi Aramco CEO Amin Nasser told reporters on October 5 that a decision on the volume of the IPO will be made depending on market conditions.

Meanwhile, OPEC Secretary General Mohammed Barkindo told reporters at the India Energy Forum organized by CERAWeek in New Delhi, that the oil-producing states succeeded in restoring the balance of supply and demand in the oil market adding that OPEC + countries will need to take extraordinary measures to maintain a sustainable market recovery.

Barkindo said consultations were underway for the extension of the OPEC-led pact beyond March 2018 and that more oil producing nations may join the supply pact, possibly at the next meeting of OPEC in Vienna on November 30.

He also said that Nigeria and Libya, who are exempted from the pact, “are making progress towards full recovery” of production, after which they could join the OPEC-led agreement.

Besides, Barkindo in an exclusive interview with Trend stressed that Azerbaijan, the participation of which is defined at 35,000 barrels per day, has been extremely supportive of the oil output cut deal of OPEC and participating non-OPEC countries,

President of Venezuela Nicolás Maduro, in turn, proposed to hold a new summit of OPEC + to discuss the formula for the price of oil.

"We had honest and good conversation. I made my proposal for the new formulas for pricing, which has already begun the debate, and I envisage a summit of heads of state and government very soon, at the end of this year or beginning of 2018, a summit in a place to be agreed upon by OPEC and non-OPEC countries," he said.

Moreover, oil companies operating in the Gulf of Mexico are restoring the work of the platforms closed at the end of last week ahead of Hurricane Nate.

Traders said that Nate’s impact had been lower than that of hurricanes hitting the region in the past month.

Market participants also continue to win back data on the dynamics of the number of drilling rigs in the U.S. The American oil and gas service company Baker Hughes, a GE Company (BHGE) reported that for the week ended on October 6, the number of installations fell by four, or by 0.4 percent to 936 units.

In annual terms, the number of drilling rigs increased by 412 units, or by 1.8 times. The number of oil drilling rigs for the week decreased by two, or by 0.3 percent to 748 units, gas production also by two, or by 1.06 percent, to 187 units.

In late 2016 OPEC member countries and non-OPEC parties, such as Azerbaijan and Russia agreed to remove 1.8 million barrels a day from global oil production.

The parties decided to extend the production adjustments for a further period of nine months, in May 2017.

The next meeting of the technical committee on monitoring the implementation of the agreement on the oil production cut of OPEC+ will be held on October 20 in Vienna.