-> Saudis see OPEC renewing resolve to reduce global surplus
-> Iraq, Kuwait also lend support to multi-nation output reduction accord
Oil has climbed more than 15 percent since early September on signs that the accord which has successfully trimmed global supplies and bolstered prices may be extended beyond March. In the U.S. last week, stockpiles of crude oil dropped to their lowest levels since January 2016 according to Wednesday's Energy Information Administration report.
Oil closed at the highest level in more than two years as Saudi Arabia and Iraq publicly endorsed an extension of production caps that have successfully eroded a worldwide surplus.
Futures rose by 0.4 percent in New York to the highest settlement since July 2015. Oil chiefs from OPEC's two largest members expressed confidence the historic accord between OPEC and other major crude suppliers that has reduced stockpiles will be extended beyond its current March expiration. Saudi Arabia and Iraq together account for almost half of the barrels of oil that OPEC produces.
Optimism is growing among investors about the longevity of the OPEC-led agreement, Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by telephone. “We are seeing more balanced markets than we’ve had since 2014.”
Saudi Oil Minister Khalid Al-Falih said in Bangkok that he expects “improving market conditions to continue, and as my colleagues in OPEC and non-OPEC gather in four weeks in Vienna, I expect that we will renew our resolve to return already improving global inventories to their normal levels.”
Iraq Oil Minister Jabbar al-Luaibi has indicated to reporters in Baghdad that it backs any OPEC decision to help bolster oil prices. Meanwhile, Kuwait also expects a proposed extension to be formalized at the upcoming Nov. 30 gathering, said Issam Almarzooq, the nation’s oil minister.