Oil Higher on China Rate Cut, Possible OPEC Move
Brent crude oil rose to near $81 a barrel on Friday after China cut interest rates and on speculation that OPEC could agree next week to reduce oil production.
China's central bank cut its benchmark interest rates for the first time in more than two years on Friday to reduce borrowing costs and support an economy on track for its slowest annual growth in 24 years.
The rate cut added to a positive mood among oil traders, many of whom expected an agreement by the Organization of the Petroleum Exporting Countries on Nov. 27 to trim production.
Brent was up by $1.53 at $80.86 a barrel at 1200 GMT, after earlier hitting a high of $81.15. The benchmark looked set to snap an eight-week losing streak if the gains were sustained on Friday.
U.S. crude was up $1.20 at $77.05 a barrel.
"Commodity prices have risen across the board," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank.
"There is hope that this step (lower Chinese interest rates) will lift commodities demand."
There was increasing speculation that OPEC would move to reduce its output to reverse a market collapse that has knocked almost 30 percent of crude oil prices since June.
Venezuela reiterated its call for production cuts, with Foreign Minister Rafael Ramirez saying it was willing to curb its own output if the Organization of the Petroleum Exporting Countries agreed to reduce production at its Nov. 27 gathering.
Russia's Foreign Ministry said on Friday Russia and Saudi Arabia had expressed "a willingness to cooperate on issues related to energy and oil markets."
Its energy minister also said Russia might cut oil production to shore up flagging prices, although its ability to change output was limited and no decision had been made yet.
"I hear more and more sounds indicating that markets are expecting a possible cut in OPEC production, from a more balanced view earlier," said Hans van Cleef, senior energy economist at Dutch bank ABN Amro in Amsterdam.
Investors kept a wary eye on talks in Vienna between Iran and the big world powers over Tehran's nuclear program.
Sharp divisions remain at the talks, which could result in the tightening, or ending, of sanctions that have severely restricted the Islamic state's oil exports.
Officials have said the nuclear talks could be extended to March from Nov. 24.
Oil Minister Bijan Zanganeh said on Thursday Iran would double its oil exports within two months if sanctions against it ended. (Additional reporting by Keith Wallis in Singapore; Editing by David Evans and Jane Baird)