(Updates with closing prices)
By Peter Nurse
Investing.com — Oil prices rose ahead of next week’s meeting of the Organization of the Petroleum Exporting Countries, despite growing views that top crude producers could sanction a larger than previously agreed increase in output.
New York-traded West Texas Intermediate, the benchmark for U.S. oil, settled the first trading session for October up 85 cents, or 1.1%, at $75.88 per barrel. For the week, WTI rose 2.6% for its sixth consecutive week of gains that have given the U.S. crude benchmark an advance of 22%.
London-traded Brent crude, the global benchmark for oil, finished Thursday’s session at $79.28 per barrel, up 97 cents or 1.2%. Brent rose 1.9% on the week. The global crude gauge has risen in five of the past six weeks, gaining a cumulative 22% just like WTI.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, meet on Monday. Reuters reported that the group was looking at going beyond an existing deal to add 400,000 barrels per day to supply each month given the pressure from consumers such as the United States and India to help reduce prices.
“Given the current environment, we believe it is safe to assume that an increase of at least 400Mbbls/d for November is guaranteed. The bigger uncertainty is whether the group will be willing to ease more aggressively,” said analysts at ING, in a note.
Crude has posted strong gains this year – both contracts are up over 50% year to date – and more gains are possible, especially after China ordered its state-owned companies to secure energy supplies for winter at all costs, suggesting the price of oil products including fuel oil and diesel will rise.
“Spot Asian LNG is trading at an oil equivalent of around US$177/bbl and so there is a clear incentive for gas-to-oil switching,” ING added. “This suggests that we should see stronger oil demand in the coming months, which means a tighter than expected oil market through until the end of the year.”