Crude Set for Weekly Gain

Brent crude oil prices were headed for their first weekly gain in five weeks on Friday buoyed by renewed hopes that OPEC might agree production cuts, but a stronger US dollar capped gains.

Brent crude oil futures were flat at $46.49 per barrel. US West Texas Intermediate crude oil futures were down 7 cents at $45.35 a barrel, Reuters reported.

OPEC member countries have proposed Iran cap its oil output at 3.92 million barrels per day under a production-limiting deal for the whole group, a source familiar with the proposal has told Reuters.

While Iran has not yet responded to the proposal, it means OPEC members may be coming nearer to a consensus on how much Iran should produce.

Iran has previously sent mixed signals, indicating it may accept a freeze at between 4 and 4.2 million bpd.

Russian Energy Minister Alexander Novak said on Friday after meeting OPEC members he was more confident an output deal could be reached between Moscow and the group to help to boost oil prices.

But analysts said there were still obstacles for the producer group to overcome before it could reach a deal. OPEC is scheduled to meet next on Nov. 30.

“Iranian and Iraqi intransigence to the proposed output cuts remains in full force while competitive pressures among OPEC members was highlighted by news that Iran displaced Saudi Arabia as the top oil supplier to India,” Stephen Brennock of oil brokerage PVM said.

Jason Gammel of US investment bank Jefferies said at least a 700,000 barrels-per-day cut is needed to balance the market in the first quarter of 2017. The rise in the US dollar to its highest levels since 2003 against a basket of currencies on Friday weighed on oil prices. A stronger US dollar makes oil, which is priced in dollars, more expensive to buyers using other currencies.