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Oil advances near US$45 as Opec may hold formal meeting in Algiers
[HONG KONG] Oil climbed near US$45 a barrel after Algeria said Opec may turn its informal talks next week into a formal session and as weekly industry data showed US crude inventories declined.
November futures rose by as much as 2.5 per cent in New York. Opec ministers can transform the gathering into an extraordinary meeting since they will all be present, Algerian Energy Minister Noureddine Bouterfa said on public radio.
Supply needs to be cut by 1 million barrels a day to rebalance the market and stabilize prices, he said. US crude stockpiles dropped by 7.5 million barrels last week, the American Petroleum Institute was said to report Tuesday.
Oil has fluctuated since August's rally on speculation the Organization of Petroleum Exporting Countries and Russia will agree on ways to stabilise the market at the meeting next week.
While Venezuelan President Nicolas Maduro said members are close to a deal, a Bloomberg survey of 23 analysts predicts an agreement to limit production is unlikely. A deal to freeze output was proposed in February but a meeting in April ended with no final accord.
"History suggests that Opec action is unlikely, but there will be talk and that will move the market," said Evan Lucas, a market strategist at IG Ltd in Melbourne.
"The API data gave the market a boost, but prices are coming from a low base. Oil is moderating around the US$44 to US$45 a barrel level."
West Texas Intermediate for November delivery rose as much as US$1.09 to US$45.14 a barrel on the New York Mercantile Exchange and was at US$44.85 at 9:36am in Hong Kong. The October contract expired Tuesday after advancing 14 US cents to close at US$43.44. Total volume traded was about 47 per cent above the 100-day average.
Brent for November settlement rose as much as 69 US cents, or 1.5 per cent, to US$46.57 a barrel on the London-based ICE Futures Europe exchange. Prices dropped 7 US cents, or 0.2 per cent, to US$45.88 a barrel on Tuesday. The global benchmark traded at a US$1.64 premium to WTI.