Oil prices jump due to OPEC+ pact prolongation prospect
By Sara Israfilbayova
World oil prices rise on Thursday due to the prospect of an extension of the global OPEC + pact, but the further expansion of the market is hampered by the increase in the U.S. exports and the restoration of the extraction of raw materials in Libya.
Brent crude, the global oil benchmark, rose 0.7 percent, to $56.18 a barrel, West Texas Intermediate (WTI) futures up 0.2 percent, to $50.07 a barrel, according to Marketwatch.
On the one hand, support for the market is provided by data on a sharp reduction in fuel stocks in the United States. However, on the other hand, traders estimate the data on the growth of the U.S. oil production and exports.
Commodity stocks of oil in the country decreased last week by 6.02 million barrels, according to the U.S. Energy Department.
At the same time, terminal reserves in Cushing, where oil is traded on NYMEX, increased from 60.9 million to 62.5 million barrels, which limits the potential for price increases.
Despite this, other factors weighed on oil prices, including the return to production of Libya’s Sharara oilfield after an armed brigade forced a two-day shutdown.
Russian President Vladimir Putin said on October 5 that he supposes the possibility of extending the pact to reduce OPEC + oil production by the end of 2018 for the sake of stabilizing the world market.
The King of Saudi Arabia arrived in Moscow.
“Putin and Salman will most likely reach, but not announce, an agreement to extend the OPEC/non-OPEC production deal, though with a commitment to taper the cuts,” said Eurasia Group.
The agreement of OPEC + reached its goal, stabilizing oil prices, said Saudi Arabia’s Energy Minister Khalid Al-Falih during the Russian-Saudi investment forum.
He went on to say stabilization of prices in the oil market has been achieved, adding that this all led to an increase in economic performance in the countries.
Earlier, Russian Energy Minister Alexander Novak said on October 5 that Moscow would support new countries joining the agreement to restrict oil supply.
OPEC and other major oil producers such as Russia and Azerbaijan
reached an agreement in December 2016 to remove 1.8 million barrels
a day from the market.
OPEC and its partners decided to extend its production cuts till
March 2018 in Vienna on May 25, as the oil cartel and its allies
step up their attempt to end a three-year supply glut that has
savaged crude prices and the global energy industry.
The next JMMC meeting is scheduled for the day prior to the full ministerial meeting on November 30 in Vienna.
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