BLBG: Oil Heads for Second Weekly Gain as OPEC Continues Output Cuts
Producers on track to meet target next month, Algeria says
Curbs to balance global crude markets early this year: Kuwait
Oil headed for a second weekly increase as OPEC and other producing nations maintained they would achieve their target of cutting production to reduce bloated global inventories and stabilize the market.
Front-month futures in New York are up 1.8 percent for the week, set for the biggest advance since Dec. 23. OPEC and other producers are due to reach the 1.8 million barrel-a-day reduction target next month, Algeriaâ€™s Energy Minister Noureddine Boutarfa said Thursday. Nations are likely to fully comply with the deal and the curbs will bring global crude markets into balance early this year, Kuwaitâ€™s oil minister said Wednesday.
Last monthâ€™s pact between the Organization of Petroleum Exporting Countries and 11 other nations gave hope to a market stuck in a 2 1/2 year slump. While Saudi Arabia says more than 80 percent of the agreed cuts have been implemented, analysts and investors are waiting for data to gauge the extent of the decrease. The International Energy Agency says rising prices will spur U.S. shale output, and drillers are adding more rigs.
â€śThe market sentiment is positive so any bullish news is being used as buying opportunity while bearish news is being ignored,â€ť said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. â€śThe litmus test will come next week with OPEC production surveys. If these surveys fail to show a substantial drop, the optimism will be put to a test.â€ť
West Texas Intermediate for March delivery fell 43 cents to $53.35 a barrel on the New York Mercantile Exchange as of 11:37 a.m. in London. Total volume traded was about 26 percent below the 100-day average. The contract gained $1.03 to $53.78 on Thursday.
Brent for March settlement dropped 64 cents to $55.60 a barrel on the London-based ICE Futures Europe exchange. The contract added 2.1 percent to close at $56.24 on Thursday. The global benchmark crude traded at a premium of $2.25 to WTI.
See also: Baker Hughes is drilling in Middle East even as OPEC cuts
A committee that was formed to monitor the production cuts will meet in Kuwait in mid-March, Boutarfa said in Algiers. Some countries havenâ€™t yet made the full output reduction, but they will increase curbs over the coming months and all are â€śhighly committedâ€ť to the deal, Kuwaitâ€™s Oil Minister Essam Al-Marzouk said Wednesday.
U.S. motorists probably would foot the bill for President Donald Trumpâ€™s 20 percent border-wall tax as domestic refiners reliant on Mexican crude pass on the cost.
Royal Dutch Shell Plc is nearing an agreement to sell a package of U.K. North Sea exploration assets for about $3 billion, according to people familiar with the matter.
An explosion occurred in a furnace at Tema Oil Refineryâ€™s crude-distillation unit at about 10 am on Thursday, Accra-based newspaper Graphic reported, citing people it didnâ€™t identify.
A slew of blazes at refineries across the globe is shrinking supplies and boosting profits from turning crude into products such as gasoline and diesel.