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Oil prices climb on hopes output cuts will be extended

Reuters  |  TOKYO 

By Aaron Sheldrick and Henning Gloystein

TOKYO (Reuters) - futures rose on Friday to the highest in nearly a month on growing optimism that big producing countries will extend output cuts to curb a persistent glut in crude, with key benchmarks heading for a second week of gains.

Brent crude was up 28 cents, or 0.5 percent, at $52.79 at 0630 GMT. The contract earlier rose to the highest since April 21 and is on track for a nearly 4 percent climb this week, its second week of gains.

U.S. crude was up 29 cents, or 0.6 percent, at $49.64 a barrel, highest since April 26. The contract is also heading for a weekly increase of almost 4 percent.

Since the beginning of March, crude prices have swung from over $56 a barrel to under $47 as market participants were divided over the impact of rising output from the United States versus production cuts by the Organization of Petroleum Exporting Countries (OPEC) and other producers, including Russia.

But market watchers are growing more confident that OPEC, Russia and other big producers will extend cuts of almost 1.8 million barrels per day (bpd) until the end of March 2018. U.S. producers are not party to any agreements capping production.

As with other markets, concerns about U.S. President Donald Trump's agenda amidst investigations in Washington faded into the background.

"With the political turmoil easing in the U.S. overnight, the market will return to the fundamental drivers," ANZ said in a research note.

"This should see prices remain well bid, as OPEC continues to talk up a continuation of the production cut agreement," it said.

On May 25, leaders from OPEC and other producing countries will meet in Vienna to decide on output policy.

Rosneft, the largest producer in Russia, will meet agreements with OPEC on output reductions, the company's chief executive told reporters in Berlin on Thursday.

Still, there are signs that Saudi Arabia, OPEC's largest producer, is keeping markets well supplied.

Crude exports from Saudi Arabia rose by 275,000 barrels a day in March from February and stockpiles rose, official data showed late on Thursday.

"The battle between bulls and bears is raging on oil," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

"On the one hand, you have traders who worry about the efficacy of OPEC's cuts on inventory levels. On the other, there are those who are focussed on the real drawdowns that have started to occur in U.S. stocks over the past month or so."

(Reporting by Aaron Sheldrick; Editing by Christian Schmollinger and Biju Dwarakanath)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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Oil prices climb on hopes output cuts will be extended

TOKYO (Reuters) - Oil futures rose on Friday to the highest in nearly a month on growing optimism that big producing countries will extend output cuts to curb a persistent glut in crude, with key benchmarks heading for a second week of gains.

By Aaron Sheldrick and Henning Gloystein

TOKYO (Reuters) - futures rose on Friday to the highest in nearly a month on growing optimism that big producing countries will extend output cuts to curb a persistent glut in crude, with key benchmarks heading for a second week of gains.

Brent crude was up 28 cents, or 0.5 percent, at $52.79 at 0630 GMT. The contract earlier rose to the highest since April 21 and is on track for a nearly 4 percent climb this week, its second week of gains.

U.S. crude was up 29 cents, or 0.6 percent, at $49.64 a barrel, highest since April 26. The contract is also heading for a weekly increase of almost 4 percent.

Since the beginning of March, crude prices have swung from over $56 a barrel to under $47 as market participants were divided over the impact of rising output from the United States versus production cuts by the Organization of Petroleum Exporting Countries (OPEC) and other producers, including Russia.

But market watchers are growing more confident that OPEC, Russia and other big producers will extend cuts of almost 1.8 million barrels per day (bpd) until the end of March 2018. U.S. producers are not party to any agreements capping production.

As with other markets, concerns about U.S. President Donald Trump's agenda amidst investigations in Washington faded into the background.

"With the political turmoil easing in the U.S. overnight, the market will return to the fundamental drivers," ANZ said in a research note.

"This should see prices remain well bid, as OPEC continues to talk up a continuation of the production cut agreement," it said.

On May 25, leaders from OPEC and other producing countries will meet in Vienna to decide on output policy.

Rosneft, the largest producer in Russia, will meet agreements with OPEC on output reductions, the company's chief executive told reporters in Berlin on Thursday.

Still, there are signs that Saudi Arabia, OPEC's largest producer, is keeping markets well supplied.

Crude exports from Saudi Arabia rose by 275,000 barrels a day in March from February and stockpiles rose, official data showed late on Thursday.

"The battle between bulls and bears is raging on oil," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

"On the one hand, you have traders who worry about the efficacy of OPEC's cuts on inventory levels. On the other, there are those who are focussed on the real drawdowns that have started to occur in U.S. stocks over the past month or so."

(Reporting by Aaron Sheldrick; Editing by Christian Schmollinger and Biju Dwarakanath)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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Business Standard
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Oil prices climb on hopes output cuts will be extended

By Aaron Sheldrick and Henning Gloystein

TOKYO (Reuters) - futures rose on Friday to the highest in nearly a month on growing optimism that big producing countries will extend output cuts to curb a persistent glut in crude, with key benchmarks heading for a second week of gains.

Brent crude was up 28 cents, or 0.5 percent, at $52.79 at 0630 GMT. The contract earlier rose to the highest since April 21 and is on track for a nearly 4 percent climb this week, its second week of gains.

U.S. crude was up 29 cents, or 0.6 percent, at $49.64 a barrel, highest since April 26. The contract is also heading for a weekly increase of almost 4 percent.

Since the beginning of March, crude prices have swung from over $56 a barrel to under $47 as market participants were divided over the impact of rising output from the United States versus production cuts by the Organization of Petroleum Exporting Countries (OPEC) and other producers, including Russia.

But market watchers are growing more confident that OPEC, Russia and other big producers will extend cuts of almost 1.8 million barrels per day (bpd) until the end of March 2018. U.S. producers are not party to any agreements capping production.

As with other markets, concerns about U.S. President Donald Trump's agenda amidst investigations in Washington faded into the background.

"With the political turmoil easing in the U.S. overnight, the market will return to the fundamental drivers," ANZ said in a research note.

"This should see prices remain well bid, as OPEC continues to talk up a continuation of the production cut agreement," it said.

On May 25, leaders from OPEC and other producing countries will meet in Vienna to decide on output policy.

Rosneft, the largest producer in Russia, will meet agreements with OPEC on output reductions, the company's chief executive told reporters in Berlin on Thursday.

Still, there are signs that Saudi Arabia, OPEC's largest producer, is keeping markets well supplied.

Crude exports from Saudi Arabia rose by 275,000 barrels a day in March from February and stockpiles rose, official data showed late on Thursday.

"The battle between bulls and bears is raging on oil," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

"On the one hand, you have traders who worry about the efficacy of OPEC's cuts on inventory levels. On the other, there are those who are focussed on the real drawdowns that have started to occur in U.S. stocks over the past month or so."

(Reporting by Aaron Sheldrick; Editing by Christian Schmollinger and Biju Dwarakanath)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

image
Business Standard
177 22