Oil holds gains as Saudis see freeze as 'positive' for market
[HONG KONG] Oil held gains as Saudi Arabia's energy minister said an output freeze would be positive for the market and after a report that Iran will participate in informal talks next month.
Futures were little changed in New York after rising 1.2 per cent Thursday. A freeze will signify that producers are content with the current situation of the market, Saudi Arabian Energy Minister Khalid Al-Falih said, ruling out an output cut.
Iran will participate in the discussions in Algiers, a state news service reported. Oil suppliers want a deal to manage production, Opec's Secretary General Mohammed Barkindo told Arabic-language newspaper Al-Hayat.
Oil entered a bull market Aug 18, less than three weeks after tumbling into a bear market. Prices surged partly on speculation that informal discussions among members of the Organisation of Petroleum Exporting Countries may lead to action to stabilise the market.
A deal to freeze output was proposed in February, but a meeting in April ended with no final accord.
"While an agreement to limit production at current levels would largely be a symbolic gesture, judging by the market reaction to the announcement of these talks that might be enough to keep prices firm," said Michael McCarthy, a chief market strategist in Sydney at CMC Markets.
"The overhanging inventories and the agility of the US shale producers will limit the topside to somewhere around US$55 to US$60 a barrel."
West Texas Intermediate for October delivery was at US$47.36 a barrel on the New York Mercantile Exchange, up 3 US cents, at 8:27 am in Hong Kong. The contract rose 56 US cents to US$47.33 on Thursday. Total volume traded was about 83 per cent below the 100-day average. Prices are down 2.4 per cent this week.
Brent for October settlement was 1 US cent higher at US$49.68 a barrel on the London-based ICE Futures Europe exchange.
The contract increased 62 US cents, or 1.3 per cent, to US$49.67 on Thursday. Prices are down 2.4 per cent this week. The global benchmark crude traded at a US$2.31 premium to WTI.
BLOOMBERG
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Energy & Commodities
Asia: Oil surges, equities sink as Iran blasts fan Middle East escalation fears
Gold set for fifth weekly gain as geopolitical risks buoy demand
Oil holds near 3-week low as US sanctions interrupt easing tensions
Seatrium unit ordered to pay US$108 million in arbitration over equipment supply contracts
BP reshapes its leadership team as some executives leave
BHP to decide on future of nickel business by August, trims met coal estimates