{"id":49788,"date":"2017-10-31T05:08:43","date_gmt":"2017-10-31T05:08:43","guid":{"rendered":"https:\/\/www.biphoo.com\/bipnews\/?p=49788"},"modified":"2017-10-31T05:08:43","modified_gmt":"2017-10-31T05:08:43","slug":"brent-oil-ends-above-60-on-expected-opec-cut-extension","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/brent-oil-ends-above-60-on-expected-opec-cut-extension.html","title":{"rendered":"Brent oil ends above $60 on expected OPEC cut extension"},"content":{"rendered":"

Brent oil ends above $60 on expected OPEC cut extension<\/span><\/strong><\/span><\/h2>\n

Brent oil ends above $60 on expected OPEC cut extension: Brent oil closed on Monday at its highest level since July 2015 and U.S. crude closed at a peak not seen since February on expectations OPEC-led production cuts would be extended beyond March, although such gains are likely to spur more U.S. production.<\/span><\/p>\n

rent crude futures LCOc1 settled at $60.90 a barrel, up 46 cents. Brent has gained 9.5 percent in the last 16 trading days.<\/span><\/p>\n

U.S. West Texas Intermediate (WTI) crude futures CLc1 settled up 25 cents at $54.15 a barrel, highest since Feb. 23, 2017. The U.S. contract has been strong of late as well, gaining 10 percent in the last 16 trading days.<\/span><\/p>\n

\u201cThe market has now held over $49\/bbl for over a month, establishing that as the low end of the new range,\u201d wrote analysts at Drillinginfo.com.<\/span><\/p>\n

The Organization of the 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.<\/span><\/p>\n

The pact, already renewed once, runs to March 2018. But Saudi Arabia and Russia, which are leading the effort, have voiced support for a further extension.<\/span><\/p>\n

OPEC Secretary General Mohammad Barkindo said Russian-Saudi backing for an extension cleared the fog before the group\u2019s meeting in Vienna on Nov. 30.<\/span><\/p>\n

Saudi Crown Prince Mohammad bin Salman over the weekend repeated the kingdom\u2019s support for extending the deal.<\/span><\/p>\n

\u201cThe market has rallied pretty significantly and I think it\u2019s predicated on the fact that the Saudis and Russians are continuing the cut agreement,\u201d said Gene McGillian, manager of research at Tradition Energy in Stamford, Conn.<\/span><\/p>\n

Monday\u2019s rally pushed Brent\u2019s December 2017 contract LCOZ7 to a premium of $2.60 a barrel over the December 2018 contract LCOZ8.<\/span><\/p>\n

This structure, known as backwardation, was at the top of OPEC\u2019s \u201cto do\u201d list, along with targeting record-high global inventories. Such a premium gives holders of physical oil an incentive to sell their stored barrels for a higher price, thus tightening markets.<\/span><\/p>\n

\u201cA lot of the investment firms are raising their price targets so there\u2019s a bit of a change in sentiment,\u201d said John Kilduff, <\/span>partner at Again Capital LLC in New York.<\/span><\/p>\n

J.P. Morgan raised <\/span>its 2018 Brent and WTI forecasts by $11 and $11.40 to $58 and $54.63 per barrel, respectively. The bank said the revision reflects OPEC and non-OPEC cuts and <\/span>higher- than-expected demand growth tightening the oil market.<\/span><\/p>\n

However, traders said a 900,000 <\/span>bpd export capacity increase from Iraq\u2019s southern ports, to 4.6 million <\/span>bpd, had prevented Brent rising further.<\/span><\/p>\n

Iraq has increased exports from its southern oilfields to 3.45 million <\/span>bpd to make up for a shortfall from the northern Kirkuk fields, Basra Oil Company Director General Ihsan Abdul Jabbar said.<\/span><\/p>\n

Source:http:\/\/www.reuters.com\/article\/us-global-oil\/brent-oil-ends-above-60-on-expected-opec-cut-extension-idUSKBN1CZ014<\/span><\/p>\n

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