Oil prices ticked up Friday morning after a week of losses, boosted by fresh signs that Saudi Arabia plans to back an extension of OPEC's deal to curb global production.
Brent crude oil, the global benchmark, was up 0.67%, at $61.77 a barrel in London midmorning trading. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 1.14%, at $55.77 a barrel.
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"There's been more comments from Saudi Arabia about extending output cuts, which brought that back to the front of [traders'] minds," said Thomas Pugh, commodities economist at Capital Economics. "But that's nothing more than what we already knew," he added.
On Thursday evening, Saudi Arabia's energy minister, Khalid al-Falih, reportedly said on the sidelines of a UN climate conference that further production cuts are necessary to continue the market rebalancing process underway. Mr. al-Falih said he supports announcing the specifics of an extension when the Organization of the Petroleum Exporting Countries meets on Nov. 30 in Vienna, according to Reuters.
OPEC and other major producers including Russia first agreed a year ago to reduce global crude output by nearly 2% in an effort to rein in the supply glut and boost prices. The deal, which was extended in May, is set to expire in March. Russia has also indicated a willingness to lengthen the cuts and is set to participate in the OPEC meeting at the end of the month.
"Anything apart from an extension to the end of 2018 is likely to send the oil price into an immediate tailspin," according to analysts at Commerzbank. But the analysts said U.S. oil production was a bigger factor for the market than the OPEC deal.
"In our view, the key factor in the supply-demand equation is the U.S. shale sector--something OPEC is keen to play down through its constant comments on the agreement to cut production," the analysts wrote in a note Friday.
On Wednesday, the U.S. Energy Information Administration said U.S. production rose last week to a record weekly high of 9.645 million barrels, while crude stockpiles climbed by 1.9 million barrels.
That report came a day after the International Energy Agency revised downwards its global oil demand forecasts for this year and next. Both the IEA and EIA reports triggered a selloff.
Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was up 0.72% at $1.72 a gallon. ICE gasoil, a benchmark for diesel, changed hands at $557.25 a metric ton, up 0.13% from the previous settlement.
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(END) Dow Jones Newswires
November 17, 2017 06:45 ET (11:45 GMT)