Hong Kong - Oil climbed to a five-week high, nearing $52 a barrel before OPEC ministers meet in Vienna to decide on extending supply cuts.
Futures rose as much as 1.1 percent in New York after closing lower Wednesday for the first time in six sessions. A committee of OPEC members and its allies recommended prolonging the curbs for another nine months, according to a statement from the group. A final decision is expected Thursday.
In the US, oil inventories fell a seventh week while output gained, government data showed. Crude has climbed as Saudi Arabia and non-OPEC member Russia rally support for an extension into 2018 of the output-cut deal by the Organisation of Petroleum Exporting Countries and its allies.
While stubbornly high global inventories have taken longer than expected to drain, signs that US stockpiles are easing from a record is adding to optimism.
“The market is waiting for the outcome of the meeting; it’s clearly going to have an impact,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. “The agreement has been remarkable with the discipline showed by participants so far. In that respect, it’s been a success.”
West Texas Intermediate for July delivery was at $51.75 a barrel on the New York Mercantile Exchange at 7:55 a.m. in London. Front-month prices earlier rose as much as 57 cents to $51.93, the highest intraday level since April 19. Total volume traded was about 24 percent above the 100-day average. Futures lost 11 cents, or 0.2 percent, to $51.36 on Wednesday.
Brent for July settlement added as much as 58 cents, or 1.1 percent, to $54.54 a barrel on the London-based ICE Futures Europe exchange. Prices fell 19 cents, or 0.4 percent, to $53.96 on Wednesday. The global benchmark crude traded at a premium of $2.65 to WTI.
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At Wednesday’s committee meeting, members agreed to monitor the market and take “further adjustment actions, if deemed necessary.” The nine-month extension to be discussed Thursday could include an option for an extra three months, Russian Energy Minister Alexander Novak said separately in Vienna.
OPEC members are “largely” on board with the nine-month extension to output cuts, Nigeria’s oil minister Emmanuel Ibe Kachikwu said in a Bloomberg television interview. US crude stockpiles dropped by 4.43 million barrels last week, according to data from the Energy Information Administration Wednesday.
They were forecast to fall by 2 million barrels in a Bloomberg survey. American crude output increased by 15,000 barrels a day to 9.32 million a day, the EIA said. It’s the 13th weekly gain in 14 weeks.