Oil prices up on optimism over OPEC deal
By Nigar Abbasova
The preliminary Algeria deal of OPEC on limiting oil production continues to gain support, while only a few days left till the Vienna meeting of the Cartel.
Oil prices rose on November 17, following optimistic comments of certain officials on the possibility of the deal. International benchmark Brent crude oil was 60 cents up to stand at $47.23, while U.S. WTI crude was 50 cents up at $46.07.
Saudi Energy Minister Khalid al-Falih said he was optimistic that OPEC would formalize a preliminary output deal reached in September. Falih voiced belief that the market was on its way to becoming balanced and that an agreement on putting ceilings on the production would speed the recovery, Reuters reported.
Meanwhile, Venezuelan President Nicolas Maduro, who held talks with OPEC Secretary-General Mohammed Barkindo in Caracas on November 16, said the group is ready to reach a "forceful" agreement on cutting oil output. He underlined that the deal should guarantee a realistic and balanced price for the countries possessing oil reserves.
Barkindo, in turn, praised Maduro for leading the effort to stabilize markets, describing the situation as the most severe oil market crisis in almost 50 years.
Also non-OPEC Russia, one of the major players of the energy market, said it was ready to support OPEC's decision on an output freeze. Energy minister of the country Alexander Novak said he sees big chances that the group will manage to agree the terms of the freeze.
A number of energy ministers from oil producing countries are also likely to meet informally in Doha on November 18 in an effort to reach a consensus. The informal meetings could include energy ministers from Saudi Arabia and Russia, while Iran's oil minister will not be attending, sending the country's OPEC governor instead.
Supply and demand ratio remains among the most influential components of oil-market behavior. Despite renewed optimism that an OPEC output freeze is on track, global oversupply and rising inventories, particularly in the United States, are acting versus the hopes for the action of the14-member group.
U.S. Energy Information Administration (EIA) revealed that crude stocks in the country increased for a third straight week and rose by 5.3 million barrels last week, by far exceeding forecasts of an increase of 1.5 million barrels.
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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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