Published: Tue, October 11, 2016
Economy | By Melissa Porter

Oil Prices Perks Up Amidst OPEC Doubts

Russian Federation media reported Monday the country is in line to join an oil production curtailment agreement proposed last month by OPEC members in Algeria.

Money managers have amassed their largest bullish position in USA crude futures in more than four months on OPEC's planned output cut, data showed on Friday.

"Petroleum producers, OPEC members should reach an agreement and should work for the stability of the petroleum industry", he said.

However, Iraq's oil minister, Jabar Ali al-Luaibi, has urged oil and natural gas producers operating in the country to continue increasing output for the rest of the year and in 2017, Iraq's oil ministry disclosed on Sunday.

"I think the role of responsible producers around the world, and Saudi Arabia considers itself to be the leading one, is to try to balance supply and demand in a very responsible way", he said at the conference in Istanbul, according to the Wall Street Journal. "It is not unthinkable we could see $60 [a barrel] by the year end".

He added: "OPEC should make sure not to crimp too tightly and create a shock to the market". The goal is to cut production to a range of 32.50-million to 33-million barrels a day. U.S. output halted its drop to the lowest in more than two years as producers haven't reduced drilling activity since the end of June. The worldwide benchmark has gained 15 per cent since OPEC agreed last month on the first supply curbs in eight years.

News that Russian Federation was not committed to a deal continued to reverse gains oil made last week, which had largely come on reports that the country would meet with key OPEC members to discuss a joint cut in production in Turkey.

Even though no formal action has been taken, crude oil prices are up 15 percent since the late September proposal. But, after nearly two years of collective suffering as the price of the commodity has languished below $50 per barrel, OPEC decided on a bold but risky gamble. He didn't give further details about the level at which the OPEC member would be prepared to cap its production. Saudi output has risen to 10.7 million bpd from 10.2 million in recent months due to local needs for summer cooling.

Opec members Iran and Iraq were also not attending this week's Istanbul meetings, sources told Reuters, despite previous expectations that they would be present.

"That turnaround in the U.S. is threatening to derail the current rally", Michael McCarthy, a chief market strategist at CMC Markets, said by phone from Sydney.

World Energy Congress in Istanbul brings together players across the energy sector to discuss a transformation of the sector.

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