Email Facebook Twitter

RNS EXCLUSIVE: Cabot praise 3D seismic mapping after successful winter programme

Finance & Stock Market News

UPDATE 10-Oil adds to rally, heads for fourth week of gains

Fri, 12th Jan 2018 05:38

* Russia's Novak: Oil market not balanced yet

* High prices risk encouraging shale production growth -IEA

* U.S. oil rig count rises 10 to 752 -Baker Hughes

* Brent, WTI hit highest since December 2014 in previous session (Adds U.S. rig count, updates prices)

By David Gaffen and Jessica Resnick-Ault

NEW YORK, Jan 12 (Reuters) - Oil prices rose for a sixth day on Friday after Russia's oil minister said that global crude supplies were "not balanced yet," alleviating market concerns about a wind-down of the OPEC-led deal to reduce production.

Russian Energy Minister Alexander Novak said ministers from leading OPEC and non-OPEC producers will discuss the possibility of exiting the deal at a coming committee meeting, but said that "we see that the market surplus is decreasing, but the market is not completely balanced yet."

His comments boosted prices, which rebounded from earlier decline, though the market has not hit the heights it touched on Thursday, when Brent crude topped $70 a barrel for the first time since December 2014.

Markets remained buoyed by the comments throughout the session, shrugging off data that suggested the U.S. production may continue to surge.

Brent crude futures rose 39 cents to $69.65 a barrel by 1:36 p.m. EST (1836 GMT). U.S. West Texas Intermediate (WTI) crude futures rose 38 cents to $64.18. WTI hit its strongest since late 2014 at $64.77 on Thursday.

For the week, Brent was set for a 2.8 percent gain while WTI was on track for a 4.3 percent rise.

The agreement between the Organization of the Petroleum Exporting Countries and Russia reached in late 2016 to cut 1.8 million barrels of crude daily is due to last until the end of 2018.

Novak said the current oil price was short-term, and he would discuss the situation at a ministerial monitoring committee meeting in Oman, scheduled for Jan. 21.

Russia's Lukoil Chief Executive Vagit Alekperov said Russia - part of the global agreement with the Organization of the Petroleum Exporting Countries to reduce supply - should start to exit the pact if crude prices remain at $70 a barrel for more than six months.

Major oil producing-countries have grown concerned that as prices remain near these levels, it will spur additional production from U.S. shale patches in Texas and North Dakota, risking overwhelming the market with additional supply, and hurting OPEC's market share.

U.S. energy companies added 10 oil rigs this week, the biggest increase since June, bringing the total rig count to 752, the most since September, General Electric Co's Baker Hughes energy services firm said.

Fatih Birol, head of the Paris-based International Energy Agency, said oil prices at $65 to $70 risked encouraging more oversupply from U.S. shale drillers.

"If you look at any kind of momentum indicator this is telling you this is way overbought," said Robert Yawger, director of energy futures at Mizuho in New York. "However, there are definitely issues supporting the market."

U.S. crude production fell in the most recent week by nearly 300,000 barrels per day to about 9.5 million bpd, which analysts attributed to the deep freeze across most of the country.

The U.S. Energy Department expects production will blow through 10 million bpd in the next few months, en route to 11 million bpd by next year, rivaling Russia and Saudi Arabia.

Futures contracts show an expectation for prices to pull back by year end, with the December U.S. crude futures contract currently trading just above $60 a barrel.

Later-dated futures trading lower than the spot price is known as backwardation, and is expected to inhibit production because it implies a lower price for future barrels sold.

(Additional reporting by Ahmad Ghaddar in London and Henning Gloystein in Singapore; Editing by Marguerita Choy and Edmund Blair)

(c) Copyright Thomson Reuters 2018. Click For Restrictions -

Back to Finance News

Share Price, Share Chat, Stock Market news at
FREE Member Services
- Setup a personalised Watchlist and Virtual Portfolio.
- Gain access to LIVE real-time Regulatory News (RNS).
- View more Trades, Directors' Deals, and Broker Ratings.
Share Price, Share Chat, Stock Market news at

Datafeed and UK data supplied by NBTrader and Digital Look. While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.