By Dan Strumpf
Oil futures advanced in Asian trade Monday following a fresh round of diplomatic wrangling ahead of a highly anticipated meeting of the Organization of the Petroleum Exporting Countries later this month.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $46.15 a barrel, up 46 cents, or 1%, in the Globex electronic session. January Brent crude on London's ICE Futures exchange rose 56 cents, or 1.2%, to $47.42 a barrel.
The weekend saw a renewed push by members of the OPEC to resolve differences ahead of the Nov. 30 meeting in Vienna. Iraq's oil minister Jabbar al-Luaibi said late Sunday the country plans to offer three new proposals this week aimed at bolstering the unity of the group.
The country's oil minister declined to give specifics about the proposals, but Iraq's contribution to a proposed supply cut by OPEC has been a key stumbling block toward reaching a deal. Iraq has been ramping up oil production for more than two years and has said it desperately needs oil revenue in order to fund its war against the Islamic State.
Market sentiment was also bolstered by comments from Iran's oil minister Bijan Zangeneh, who on Saturday said OPEC is "highly likely" to reach a final agreement to curb oil production later this month.
"Traders will be looking at this rhetoric and saying, 'well it seems like it's almost a forgone conclusion that they'll come up with something,'" said Stuart Ive, private client manager at OM Financial. "There's too much at stake for them now, so they need to deliver."
While oil prices have retreated sharply from highs above $50 a barrel reached in October, they have rebounded in recent sessions amidst diplomatic maneuvers by OPEC members. The cartel is looking to cut production to between 32.5 million and 33 million barrels a day, down from record levels of 33.83 million barrels a day of output in October.
Still, differences within the group remain wide, and OPEC has failed repeatedly to deliver on production cuts since oil prices began to tumble two years ago. OPEC's deadlock and elevated production among non-OPEC members like the U.S. have contributed to low prices.
Looking ahead, the oil market is still coming to grips with a Donald Trump presidency, which is widely expected to bring looser regulations--and potentially higher output--of U.S. oil and gas.
"U.S. elections have further muddled the decision-making process as Donald Trump has made strong statements about Iranian sanctions and banning imports of Saudi crude," analysts at Barclays wrote in a note to clients. They expect OPEC to agree to a "face-saving statement" at its Nov. 30 meeting, which would "show case agreement, provide flexibility and not veer too far from what countries had planned initially for" the first half of 2017.
Nymex reformulated gasoline blendstock for December--the benchmark gasoline contract--rose 104 points to $1.3495 a gallon, while December diesel traded at $1.4689, 112 points higher.
ICE gasoil for December changed hands at $430.00 a metric ton, up $6.00 from Friday's settlement.
Write to Dan Strumpf at firstname.lastname@example.org
(END) Dow Jones Newswires
November 20, 2016 23:03 ET (04:03 GMT)
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