Crude oil prices on the New York and London markets began the week on the rise, reflecting renewed optimism over the possibility that an agreement limiting production will be reached in Vienna at the Nov. 30 meeting of the Organization of Petroleum Exporting Countries.
Iraq’s Oil Minister Jabbar al-Luaibi said late last week that he’s optimistic a deal will be reached and that his country will offer proposals to help the organization move toward that goal.
With Iran’s Oil Minister Bijan Namdar Zanganeh also recently stating a deal is “highly probable,” the two primary obstacles to the agreement have changed the mood of traders and other market observers heading into the meeting. Russian President Vladimir Putin also has expressed his optimism, reaffirming his country’s pledge to cooperate with OPEC members.
In a research note, meanwhile, Barclays analysts said they “expect OPEC to agree to a face-saving statement” that “would showcase agreement, provide flexibility, and not veer too far from what countries had planned initially for [first-half 2017].”
They noted that “US elections have further muddled the decision-making process as [US President-elect] Donald Trump has made strong statements about Iranian sanctions and banning imports of Saudi crude. In addition, the return of Nigerian and Libyan production has put an ocean between OPEC and its previously suggested production targets.”
The natural gas contract for December climbed 14¢ to a rounded $2.84/MMbtu. On the spot market, the Henry Hub gas price jumped 25¢ to $2.58/MMbtu.
Heating oil for December climbed about 1.1¢ to a rounded $1.46/gal. The price for reformulated gasoline stock for oxygenates blending for December was virtually unchanged at a rounded $1.34/gal.
The January and February Brent crude contracts on London’s ICE each increased 37¢ to $46.86/bbl and $47.97/bbl, respectively. The December gas oil contract rose 50¢ to $424/tonne.
The average price for OPEC’s basket of benchmark crudes on Nov. 18 was $42.33/bbl, down 50¢.