Brent rises on hopes of OPEC cut

Oil-world 121 November 2014 – Brent briefly touched $80 a barrel on Friday on speculation Opec could agree to output cuts at its meeting next week, with strong US economic data also bolstering oil prices.

Venezuela reiterated its call for production cuts, with Foreign Minister Rafael Ramirez saying it was willing to cut its own output if Opec agreed to reduce production at its 27 November meeting.

Libya, Ecuador and Venezuela earlier called for Opec to cut production. Iran urged fellow Opec members to shore up oil prices while saying a reduction in output was unlikely.

“There’s been a lot of rumours on what Opec might decide to do in its upcoming meeting in the last 24 hours,” which fuelled a jump in both Brent and US crude prices, said Victor Shum, managing director of downstream energy consulting with IHS.

Brent hit $80 a barrel in early Asian trade on Friday and US crude futures rose nearly $1 although prices retreated as traders took positions and investors bet on the outcome of the Opec meeting, Shum said.

“I think it will be very difficult for Opec to agree a cut and announce a headline number,” he added.

Brent was up 24 cents at $79.57 a barrel early on Friday after jumping $1.23 in the previous session. The benchmark could snap an eight-week slide if the gains are sustained on Friday.

US crude for January delivery rose 46 cents to $76.31 a barrel after gaining $1 in the previous session.

Oil prices were supported by a raft of US economic data that came out overnight in the Asian time zone.

That included a business activity index that surged to its highest level in 21 years, while home resales rose to an annual rate of 5.26 million units, the highest since September 2013.

Further signs of optimism about the US economy came with US jobless claims, which have remained below the 300,000 threshold for 10 straight weeks, although they fell less than expected last week.

Investors are also keeping an eye on Iran. Sharp divisions remain between Tehran and world powers on an agreement over Iran’s nuclear programme, which could see the deadline for a pact extended to March from 24 November, officials said on Thursday.

About the Author