Oil Price - Nov 24

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Bloomberg -- OPEC and Russia have crafted the outline of a deal to extend their oil production cuts to the end of next year, although both sides are still hammering out crucial details, according to people involved in the conversations.

The Organization of Petroleum Exporting Countries and several non-OPEC nations led by Russia will meet next week in Vienna to discuss prolonging their output curbs. The Kremlin had been hesitating over the need for an extension because the current deal doesn’t expire until the end of March.

After days of talks, Moscow and Riyadh now agree they should announce an additional period of cuts at the Nov. 30 meeting, the people said, asking not to be named because the conversations are private. Russia wants the extension deal to include new language that would link the size of the curbs to the health of the oil market, they said.

“The goal to re-balance the market hasn’t been met in full yet, so everyone is in favor of extensions to reach final goals, Russia also supports these proposals,” Energy Minister Alexander Novak said in an interview with RBC television on Friday. “Different options are considered now, we will discuss details at the Nov. 30 meeting.”

The deal isn’t finalized as Russia and Saudi Arabia haven’t yet agreed on the new language, the people said. Oil ministers are due to start arriving in Vienna for the talks early next week.

OPEC and non-OPEC countries are discussing several formulas to accommodate the Russian demands, including linking the cuts to the supply-demand balance on the global oil market, or the level of fuel inventories in industrialized countries, the people said. Another option is making a clear reference to the fact that the deal could be reviewed again early next year, including the possibility of calling another meeting.
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Investing.com - Crude oil prices remained supported on Friday, amid ongoing optimism over the rebalancing of the market and as the partial closure of the a key North-American pipeline sparked supply disruption concerns.

The U.S. West Texas Intermediate crude January contract was up 71 cents or about 1.22% at $58.73 a barrel by 09:50 a.m. ET (13:50 GMT), its highest since July 2015.

Elsewhere, Brent oil for January delivery on the ICE Futures Exchange in London was steady at $63.55 a barrel. (Note that gap between Brent and WTI has narrowed to less than $5.00. It had been more than $6.00, which encouraged exports of U.S. oil to Europe.)

Trade volumes were expected to remain thin with U.S. markets open for only half a day on Friday after the Thanksgiving holiday on Thursday. < Oil trading goes on all day.

Prices increased following news that an oil spill forced the partial closure of the Keystone pipeline connecting Canadian oilfields with the U.S. on Friday

The commodity was already supported after the EIA reported on Wednesday that crude oil inventories fell by 1.9 million barrels last week, marking the first decline in three weeks. That was compared with analysts' expectations for a decline of 1.5 million barrels.

Prices received an additional boost from growing signals that the Organization of Petroleum Exporting Countries (OPEC) and its allies will agree to prolong supply curbs beyond March when producers meet in Vienna next week.

Top crude exporter Saudi Arabia is lobbying oil ministers to agree on a nine-month extension to OPEC-led supply cuts, sources familiar with the matter said, as Riyadh seeks to ensure a price-sapping glut is eradicated.

OPEC, together with a group of non-OPEC producers led by Russia, has been restraining output since the start of this year in a bid to end a global supply overhang and prop up prices.

The deal to curb output is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss the outlook for the policy.

Elsewhere, gasoline futures were up 0.08% at $1.779 a gallon, while natural gas futures lost 2.49% to $2.894 per million British thermal units.