Brent Holds Above $60

Brent Holds Above $60Brent Holds Above $60

Brent oil held above $60 a barrel on Monday, near its highest since mid-2015, on expectations OPEC-led production cuts would be extended beyond March, although rising Iraqi exports put a lid on prices.

Benchmark Brent crude futures were 7 cents higher at $60.51 per barrel, close to their highest since July 2015. They are 36% above the 2017 lows marked in June.

US West Texas Intermediate crude futures were little changed at $53.89 a barrel, near an eight-month high, CNBC reported. “The latest uptick can to a certain extent be attributed to further Saudi and Russian support for extending the supply cut,” consultancy JBC Energy said. The Organization of Petroleum Exporting Countries plus Russia and nine other producers agreed to cut 1.8 million barrels per day from January 2016 to clear a supply glut.

The pact, already renewed once, now runs through March 2018, but Saudi Arabia and Russia, who are leading the effort, have voiced support to for a further extension.

OPEC Secretary-General Mohammed Barkindo said Russian-Saudi backing for an extension cleared the fog before the group’s meeting in Vienna on Nov. 30.

Saudi Crown Prince Mohammad bin Salman repeated the kingdom’s support for extending the deal at the weekend.

However, traders said a 900,000-bpd export capacity increase from Iraq’s southern ports to 4.6 million bpd had prevented Brent from rising further.

Also helping to keep a lid on prices, US production is up by almost 13% since mid-2016, resulting in a steep WTI discount of $6.5 per barrel against Brent, making US crude exports attractive.

Nevertheless, hedge funds and other money managers raised their bullish wagers on US crude futures and options in the week to Oct. 24, the US Commodity Futures Trading Commission said on Friday. The speculator group raised its combined futures and options position in New York and London by 15,041 contracts to 280,634 during the period. Some analysts added a note of caution.


Add new comment

Read our comment policy before posting your viewpoints