Oil in New York briefly rose above $50 for the first time since May after OPEC said the group and its partners will meet next week to discuss why some nations are falling behind on their pledge to cut production.
Futures gained as much as 0.7 percent after surging 8.6 percent last week. The Abu Dhabi meeting, co-chaired by Kuwait and Russia, is set to take place after Saudi Arabia said last week it would step up pressure on countries that aren’t complying. The U.S. is said to be considering increasing sanctions against Venezuela’s oil industry, the Wall Street Journal reported, citing two people familiar with the deliberations.
Oil gained last week to rise above its 200-day moving average for the first time since May as concerns eased that efforts by the Organization of Petroleum Exporting Countries and its allies to curb output will be offset by rising production elsewhere. U.S. rigs targeting crude inched higher last week, rising by two to 766, Baker Hughes Inc. data showed Friday.
“The market is closely watching the adherence to those cuts,” said Daniel Hynes, a Sydney-based analyst at Australia & New Zealand Banking Group Ltd. “We estimate that the market is fairly balanced at the moment, so any small swing from output, particularly from OPEC, can push the market either into surplus or deficit.”
Abu Dhabi Meeting
West Texas Intermediate for September delivery rose as much as 35 cents to $50.06 a barrel on the New York Mercantile Exchange and was at $49.89 at 4:12 p.m. in Tokyo. Total volume traded was 61 percent above the 100-day average. Prices gained $3.94 last week to close at $49.71 on Friday, the highest settlement since May 26. Front-month futures have advanced 8.4 percent in July, the biggest monthly gain this year.
Brent for September settlement, which expires Monday, added as much as 40 cents, or 0.8 percent, to $52.92 a barrel on the London-based ICE Futures Europe exchange. The contract added 9.3 percent last week. The global benchmark traded at a premium of $2.84 to WTI. The more-actively traded October contract climbed as much as 33 cents, or 0.6 percent, to $52.55.
Representatives of some OPEC and non-OPEC nations will meet in the United Arab Emirates capital on Aug. 7-8 to discuss why some of them aren’t fully implementing their cuts, according to an OPEC statement. Some will argue that the independent sources used by OPEC to assess compliance overestimate their production, according to two people familiar with the matter, who asked not to be identified because the discussions aren’t public.
Iran is optimistic that crude stockpiles will reach a “more favorable” level, the nation’s oil ministry news service Shana reports, citing Iranian Oil Minister Bijan Zanganeh after meeting with his Iraq counterpart in Tehran.
Money managers increased their bullish WTI oil crude bets to a three-month high, according to weekly U.S. Commodity Futures Trading Commission data.