By Dan Strumpf
Oil futures advanced in Asian trade Monday following fresh diplomatic wrangling ahead of a highly anticipated meeting of the Organization of the Petroleum Exporting Countries next week.
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.
Over the weekend, OPEC members worked to resolve their differences ahead of their Nov. 30 meeting in Vienna. Late Sunday, Jabbar al-Luaibi, Iraq's oil minister, said the country plans to offer three newproposals this week in an effort to improve unity.
He declined to give specifics about the proposals, but Iraq's contribution to a proposed OPEC supply cut has been a key stumbling block toward reaching a deal. Iraq has been ramping up production for more than two years and has said it desperately needs oil revenue to fund its war against Islamic State.
Market sentiment was also aided by comments from Bijan Zangeneh, Iran's oil minister, who said Saturday that OPEC is "highly likely" to reach a final agreement on curbing production later this month.
"Traders will be looking at this rhetoric and saying, 'well it seems like it's almost a foregone 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 the highs above $50 a barrel reached in October, they have rebounded in recent sessions amid diplomatic maneuvering by OPEC members. It is looking to cut production to between 32.5 million and 33 million barrels a day from record levels of 33.83 million barrels a day in October.
Still, differences within the group remain and OPEC has repeatedly failed 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.
Write to Dan Strumpf at firstname.lastname@example.org
(END) Dow Jones Newswires
November 21, 2016 01:57 ET (06:57 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.