Oil prices jump 8 per cent to five-week high

Business Wednesday 30/November/2016 18:20 PM
By: Times News Service
Oil prices jump 8 per cent to five-week high

London: Oil prices jumped more than 8 per cent on Wednesday to a five-week high as some of the world's largest oil producers gathered in Vienna for a production cut that could be bigger than expected.
Brent crude futures for delivery in January were up $3.83, or 8.3 per cent, at $50.21 a barrel by 1236GMT, recovering from a drop of nearly 4 per cent on Tuesday and on course for their biggest one-day move in nine months. Brent crude for delivery in February was up $3.76 at $51.08 a barrel.
US West Texas Intermediate (WTI) crude futures were $3.63 higher at $48.86 a barrel, a one-week high.
A preliminary agreement struck by Opec in Algiers in September set an output cap at around 32.5-33 million barrels per day compared with the current 33.64 million bpd.
"It does rather look as though Opec is going to come to an agreement," said Colin Smith, director of oil and gas research at Panmure Gordon in London.
Heading into the meeting, Saudi Arabia's energy minister, Khalid Al Falih, said the market's fundamentals were moving in the right direction, but he believed the group was "getting close to a deal".
"The extent of the (price) move shows no one wants to miss the boat. There must be a general consensus that there will be a cut, whether it's going to be bullish, I don't know, but it's the domino effect," PVM Oil Associates analyst Tamas Varga said.
Traders said markets were jittery and prices could swing sharply in either direction depending on developments in Vienna.
Oil fell by nearly 4 per cent on Tuesday on reports of disputes between Saudi Arabia, Iran and Iraq over details of the planned production cut.
Iran and Iraq have been resisting pressure from Saudi Arabia to curtail production, making it harder for the group to reach an agreement on output cuts.
Analysts at Goldman Sachs, Barclays, and ANZ said oil prices would quickly fall to the low $40s a barrel if OPEC fails to strike a deal to cut output. -Reuters