Economy

Oil prices rise ahead of OPEC meeting

Oil prices rise ahead of OPEC meeting

There was no settlement Thursday because of the Thanksgiving holiday in the US, and all transactions will be booked Friday.

West Texas Intermediate crude oil trading on the New York Mercantile Exchange for January delivery finished up 93 cents, or 1.6%, at $58.95 a barrel.

Brent crude futures were at $63.42, down 13 cents.

WTI crude is being supported by the closure of the 590,000-barrel-per-day (bpd) Keystone pipeline following a spill last week.

An understanding had also been reached that an announcement should be made at that OPEC meeting, scheduled for 30 November.

Crude oil prices settled higher on Friday supported by tighter supplies amid ongoing disruption to the Keystone pipeline, while a report suggesting OPEC and Russian Federation agreed on a plan to extend output curbs lifted sentiment. "That suggests that a broad consensus has been built and the meeting is really just a rubber stamp to agree the extension of the Saudis' favoured 9-month extension period", said Greg McKenna, chief market strategist at futures brokerage AxiTrader, in a note on Friday.

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Taking the middle ground at the same forum, Mohammed al-Sada, oil minister for Qatar, agreed that OPEC has been successful in bringing global oil inventories closer to their five-year average; however, he said on the sidelines that "In my view, an extension of the agreement will help us in stabilizing the market".

"Imagine though if all the tensions in the Middle East, between the Saudis and Iranians and between other Gulf states and Qatar, somehow derail the meeting".

However, rising U.S. oil production has curbed crude price gains, as it fills some of the gap left by OPEC and its allies. "And combine that with continue inventory declines here in the USA, that's painting a picture of somewhat higher prices in 2018".

The increased production is likely to translate into higher exports, especially to Asia.

USA crude production rose to weekly record of 9.66 million bpd, the Energy Information Agency said Wednesday.

"Logistics are a big bottleneck", he said.