January compliance with oil reduction pact 133 pct -OPEC's Barkindo

Gladys Abbott
February 21, 2018

Brent futures rose 55 cents or 0.85% to US$65.39 per barrel, while West Texas Intermediate (WTI) grew 78 cents or 0.78% to US$62.46 per barrel.

According to traders, the higher prices of American oil are due to the reduced capacity of the Canadian oil pipeline Keystone at the end of past year due to a leak. A more robust dollar makes oil and other dollar-denominated commodities more expensive for holders of other currencies.

Last week, the number of US oil rigs drilling for new production rose for a fourth straight week to 798, an indication that USA crude output C-OUT-T-EIA, already at a record 10.27 million bpd, may rise further.

Oil and gas-related stocks staged a rally at Bursa Malaysia in the morning session today, amid a rise in crude oil prices, including Brent crude that hit a two-week high.

Additionally, while Russian Federation pledged to stand with OPEC, late a year ago the country's producers dramatically ramped up output just before they were due to renew their production-curbing deal with the cartel.

The split of the two major crude benchmarks has shrunk WTI's cut rate to Brent by less than $3 per barrel, compared to more than $7 late past year.

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The OPEC Secretary-General made the comments while speaking at a conference in Nigeria's capital Abuja.

The Organization of the Petroleum Exporting Countries and 10 producers outside the cartel, including Russian Federation, have been holding back crude output by 1.8 million barrels a day since the start of past year. The group is seeking to " institutionalise" their cooperation beyond the end of a supply cut deal later this year, according to the United Arab Emirates, while Barkindo said compliance to the deal stood at 133 per cent in January.

Saudi Arabia - not least in an attempt to give the planned listing of its state-owned oil giant Saudi Aramco a boost - wants Russian Federation and other producers to keep withholding supplies to prop up prices.

OPEC and non-OPEC producers are restraining production to prop up prices under a deal that is to expire at the end of 2018.

USA crude has risen to a near two-week high on signs of inventory declines at a key storage hub, while Brent eased under pressure from a stronger dollar.

The most active gold futures contract on the Comex market in NY touched a high of $1,358.60 an ounce in midday trade, up more than 2pc or almost $30 an ounce compared to Tuesday's settlement after inflation data in the U.S. came in higher than expectations.

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