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Oil steadies as Saudi Arabia says it’s optimistic on OPEC deal

🕐 3 min read

Crude oil traded near $46 a barrel as Saudi Arabia, due to meet with Russia and some OPEC nations in Doha, said it’s optimistic that producers will reach an agreement to stabilize world markets.

Futures advanced 0.8 percent in New York after dropping 0.5 percent Wednesday. Saudi Minister of Energy and Industry Khalid Al-Falih told Al Arabiya television he’s “optimistic” a deal will be concluded, and that supply and demand will come into balance more quickly if the Organization of Petroleum Exporting Countries settles on a production ceiling of 32.5 million barrels a day.

Crude has retreated since reaching a 2016 high last month near $52 a barrel amid skepticism about the ability of OPEC to implement a deal at its Nov. 30 meeting in Vienna. The group is seeking to trim output for the first time in eight years, a plan complicated by Iran’s commitment to boost production and Iraq’s contention that it should be exempt so it can fund its war with Islamic militants. OPEC will likely complete an accord that doesn’t include individual supply targets for members, according to a Bloomberg survey.

“With or without OPEC’s help, the global oil market will grind its way towards a better balance over the next six to twelve months,” Giovanni Staunovo, an analyst at UBS Group in Zurich, said in a report.

West Texas Intermediate for December delivery was at $45.93 a barrel on the New York Mercantile Exchange, 36 cents higher, at 11:21 a.m. in London. The contract lost 24 cents to $45.57 on Wednesday. Total volume traded was about 14 percent above the 100-day average.

Brent for January settlement was 51 cents higher at $47.14 a barrel on the London-based ICE Futures Europe exchange. The contract fell 32 cents to $46.63 on Wednesday. The global benchmark traded at a premium of 63 cents to January WTI.

Russia will hold discussions with OPEC representatives in Doha from Thursday, Energy Minister Alexander Novak said. There’s a high chance of an agreement and Russia is ready to support a decision, he said.

Neither Iran nor Iraq will send their ministers to Doha. Hamed Al-Zobaie, Iraq’s deputy minister for natural gas affairs, will represent the country, according to a spokesman from the oil ministry. Iran will send OPEC Governor Hossein Kazempour Ardebili and the country’s national representative at OPEC, Behrooz Baikalizadeh, an official said. Delegates are gathering for the Gas Exporting Countries Forum on Nov. 17-18.

OPEC Secretary-General Mohammed Barkindo recently met with Saudi Arabia’sAl-Falih in London, according to an OPEC delegate. Barkindo also met Venezuelan President Nicolas Maduro Wednesday and is scheduled to hold talks with Ecuador’s President Rafael Correa Thursday before traveling to Iran.

Other oil-market news:

– U.S. crude stockpiles climbed for a third week, the longest run of gains since August, according to a government report. Stockpiles increased by 5.27 million barrels to 490.3 million barrels last week, according to a report Wednesday from the Energy Information Administration.

– UBS sees Brent oil trading at $55 a barrel in six months as supply and demand rebalance, and at $60 in 12 months, according to an e-mailed report.

– The current oil-price cycle has lasted too long and is “probably the worst” in the last 50 years, OPEC’s Barkindo said in Caracas.

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