Oil set for strongest since 2004; Iraq hints at Opec extension
21 Sep 2017 - 0:29
London: Oil rose was on course for its largest third-quarter gain in 13 years as prices rose yesterday after the Iraqi oil minister said that Opec and its partners are considering extending or deepening output cuts aimed at reducing a global supply glut.
Brent crude futures were up 48 cents at $55.62 a barrel by 1020 GMT, while US West Texas Intermediate (WTI) crude futures rose 54 cents to $50.02.
The oil price is on course for a rise of 15.5 percent this quarter, which would make this year’s performance the strongest for the third quarter since 2004.
The Organization of the Petroleum Exporting Countries and other producers are considering a range of options, including an extension of cuts, but it is premature to decide on what to do beyond the agreement’s expiry in March, Iraqi oil minister Jabbar Al Luaibi told an energy conference on Tuesday.
Opec and non-Opec producers including Russia have agreed to reduce output by about 1.8 million barrels per day (b/d) until March to reduce global oil inventories and support prices.
Some producers think the pact should be extended for three or four months, others want it to run until the end of 2018, while some, including Ecuador and Iraq, think there should be another round of supply cuts, Al Luaibi said.
Analysts, however, doubt that such an extension would have much of an impact on the overall oil market. Georgi Slavov, head of research at commodities brokerage Marex Spectron said he does not expect demand for crude oil to rise significantly in the final quarter of this year, which means supply would have to be restricted even more tightly.
Crude inventories rose by 1.4 million barrels in the week to September 15 to 470.3 million, compared with expectations of a 3.5 million barrel increase.