Opec makes last-ditch bid to save oil deal as tensions grow

Oil climbed as Iraq’s oil minister said it pledged to cooperate with Opec to reach an agreement this week that’s acceptable to all members.

Futures rose as much as 3.5 per cent in New York after earlier declining. Iraq’s Oil Minister Jabbar al-Luaibi said Monday he’s “optimistic” a deal will be reached at Opec’s summit in Vienna on Wednesday. Saudi Arabia previously said that the producer group doesn’t necessarily need to curb oil output, after pulling out of a scheduled meeting with non-members including Russia.

The Organization of Petroleum Exporting Countries (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,” Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas in London, said. “What we have now is the usual poker game ahead of the meeting, where you have the various producers positioning themselves, each with their own agenda. In the end, they will sit down behind closed doors — they will have to show their cards.”

West Texas Intermediate for January delivery rose $1.19 to $47.25 a barrel at 12:14 pm on the New York Mercantile Exchange. Total volume traded on Monday was 27 per cent higher than the 100-day average.

Brent for January settlement advanced $1.15, or 2.4 per cent, to $48.39 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a $1.14 premium to WTI.

While Saudi Arabia has pushed to reverse Opec’s pump-at-will policy, Energy Minister Khalid Al-Falih said Sunday the oil market would recover in 2017 even without cuts as consumption grows in countries such as the US, according to Saudi newspaper Asharq al-Awsat.