Oil Advances on Production Cap Discussions
By Stephanie Yang and Sarah McFarlane
Oil prices advanced Thursday, boosted by discussions between OPEC and Russia to continue a plan to curb production and support prices.
Light, sweet crude for November delivery rose $1.02, or 2%, to $51.00 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, gained $1.24, or 2.2%, to $57.05 a barrel.
Saudi Arabia's King Salman and Russian President Vladimir Putin are meeting Thursday to discuss continuing efforts to push up oil prices by limiting output from major producers within and outside of the Organization of the Petroleum Exporting Countries.
Last month, U.S. oil futures entered a bull market on signs that OPEC cuts were finally having an impact on the global supply glut. The Thursday meeting is expected to address keeping Russia on board with the planned cuts, The Wall Street Journal reported, which are currently slated to extend through the first quarter of 2018.
"It's back to the media," said Dominick Chirichella, an analyst at the Energy Management Institute. "The market's gotten a little more confident that Russia is going to work with OPEC most likely to extend the accord."
The possibility of another tropical storm disrupting oil production in the Gulf of Mexico also has the market on edge, analysts said. According to the National Hurricane Center, Tropical Storm Nate is expected to strengthen into a hurricane and make landfall this weekend near New Orleans.
The threat of another storm halting some production helped add to the bullish sentiment Thursday, said Ric Navy, senior vice president for energy futures at R.J. O'Brien & Associates LLC.
"Buyers become a bit more aggressive," he said. "It makes [oil] a little more vulnerable to rallies, and that's what we're seeing."