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[SYDNEY] Oil traded near the highest closing level in 16 months as the world's two largest crude producers, Saudi Arabia and Russia, said they're ready to cooperate to limit output.
Futures declined by as much as 0.5 per cent in New York after climbing 3.1 per cent Monday. Russia is willing to join Opec efforts to stabilise the market, requiring either a freeze or cut to current production levels, President Vladimir Putin said on Monday at the World Energy Congress in Istanbul.
Saudi Arabia's Energy and Industry Minister Khalid Al-Falih said other producers are ready to cooperate and he's "optimistic" there'll be a deal that could lift prices as high as US$60 by year-end. US crude inventories were said to increase by 1.75 million barrels to 501.5 million barrels last week, according to a Bloomberg survey.
Crude closed at the highest level since July 2015 on Monday as the Organization of Petroleum Exporting Countries weighs its first output reduction in eight years with a 700,000 barrel a day cut possible in November. Russia is ready in principle to consider Opec proposals, including the possibility of cuts, Energy Minister Alexander Novak said in Istanbul.
West Texas Intermediate oil for November delivery dropped as much as 25 US cents to US$51.10 a barrel on the New York Mercantile Exchange and was at US$51.24 at 9:45am in Sydney. Total volume traded was about 83 per cent less than the 100-day average.
Brent for December settlement increased US$1.21, or 2.3 per cent, to US$53.14 a barrel on the London-based ICE Futures Europe exchange on Monday. It was the highest close since Aug 31, 2015. The global benchmark crude closed at a US$1.27 premium to WTI for the same month.