Oil hits eight-month high as producers say market rebalancing

Oil Rises Nearly 1

The 14-member Organization of the Petroleum Exporting Countries (OPEC), led by No. 1 crude exporter Saudi Arabia, is expected to discuss in Vienna on Friday a range of price support options for oil with non-OPEC members led by Russian Federation, the world's largest crude producer.

The November Brent crude futures contract was up 89 cents at $57.75 a barrel by 1204 GMT, its highest since January 3.

-Still, prices of Nymex and Brent are hovering near their best levels in months, on optimism that the production cap deal has caused some oversupplied markets to start showing signs of tightening.

Major oil producers convening in Vienna for an OPEC-led committee meeting on Friday boasted record compliance with their production-cut agreement, but, as expected, chose to wait a bit longer to see if any further action was needed.

CPC said that its average price for crude oil was US$55.02 per barrel this week, up from US$53.7 per barrel last week.

Outside of that, USA refinery demand has picked up and that's helping to narrow the spread between Brent and WTI.

"Continued declining US oil rigs and continued declining inventories is giving support to oil", said Bjarne Schieldrop, chief commodities analyst at SEB in Oslo.

No decision was taken during the meeting to extend the deal, which is now scheduled to end in March 2018. U.S. Treasury Secretary Steve Mnuchin on Sunday said President Donald Trump wants to avoid nuclear war with North Korea and "will do everything we can" to avoid conflict.

"OPEC's compliance has been acceptable overall. Changes are really related to Libya and Nigeria and the 100 percent compliance of everyone", Bijan Zanganeh, Iran 's oil minister, told journalists on Friday.

The front-month in USA crude's West Texas Intermediate (WTI) futures settled down $0.14, or 0.3%, at $50.55 a barrel on the New York Mercantile Exchange.

Iraq's goal to boost production capacity to 5 million barrels a day won't affect markets and not all new output will be exported, Oil Minister Jabbar Al-Luaibi said in Baghdad.

Kachikwu noted that even though Nigeria hit 1.802 million barrels per day in the month of August that was not enough justification for a call by some countries for Nigeria to be brought into the fold. "The more favourable supply-demand dynamic could see Brent crude reach $60 per barrel and two-year highs this year".

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