Crude prices climb on optimism over output cut
By Nigar Abbasova
With volatility still being name of the game in the energy market, the preliminary Algiers deal continues to pick up supportive signs.
World oil prices rose by more than 1 percent on November 21 as the OPEC moved closer to an output cut deal, which is believed to oust the reigning pressure of oversupply from the black gold market.
International Brent crude oil futures stood at $47.48 per barrel, recording an increase of 62 cents, or 1.3 percent, while U.S. West Texas Intermediate (WTI) crude was up by 1.2 percent or 56 cents and traded at $46.25 a barrel.
Oil prices, which have been rising and falling on the prospects of the deal, looked more promising after a number of optimistic signals coming from officials of the oil producing countries.
The main push came from Russian President Vladimir Putin, who said that non-OPEC Russia is ready to freeze oil output at the current level without hurting its economy.
"As for the upcoming OPEC meeting and our stance, it has not changed. We said numerous times we are ready to freeze production at the level it is now. We do not expect our energy sector to take any damage from this,” Putin told reporters. Despite being not sure on whether the Cartel would finalize the deal on curbing oil output, Putin said that those outlooks were positive.
Meanwhile, Iraq’s Oil Minister Jabbar al-Luaibi said that the country, which is OPEC’s second-biggest producer after Saudi Arabia, will offer three new proposals at a meeting in Vienna this coming week to discuss implementing an OPEC accord to cut output.
“Our alternatives are based on other variables and will make it easier for OPEC members to make a decision. All of the options will be logical and in line with OPEC policy,” he told The Wall Street Journal.
The comments were assessed by market watchers as the sign that the country, which previously refused the deal, is inching closer to resolving its differences with the cartel.
The market was also influenced by comments of Iran's Oil Minister Bijan Zanganeh, who said that OPEC is “highly likely” to reach a final agreement to put ceilings on oil production later this month, adding that the deal could boost prices up to $55 to $60 a barrel.
The group, which controls over a third of global oil production, is looking to cut production to between 32.5 million and 33 million barrels per day, down from its record output level of 33.83 million barrels fixed in October 2016.
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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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