Oil markets firm on expected extension of production cuts

Published 2017-10-29, 08:31 p/m
© Reuters.  Oil markets firm on expected extension of production cuts
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* Saudi Arabia, Russia favour extending oil production cuts

* Brent crude above $60 per barrel, near 2015 highs

* U.S. WTI crude above $54 per barrel

By Henning Gloystein

SINGAPORE, Oct 30 (Reuters) - Oil markets were firm on Monday, with Brent crude opening above $60 per barrel on expectations an OPEC-led production cut due to expire next March would be extended.

Brent crude oil futures LCOc1 , the international benchmark for oil prices, were at $60.63 per barrel at 0018 GMT, up 19 cents or 0.3 percent from their last settlement.

That's close to their highest level since July 2015 and up more than 36 percent since their 2017 lows last June.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were up by 16 cents, or 0.3 percent, at $54.06 a barrel.

"With strong compliance to OPEC's production curbs already supporting prices, comments from the Saudi Arabian Crown Prince that suggested the production cut agreement should be extended added to gains," ANZ bank said on Monday. Organization of the Petroleum Exporting Countries (OPEC) plus Russia and nine other producers have agreed to hold back about 1.8 million barrels per day (bpd) to get rid of a supply glut. The pact runs to March 2018, but Saudi Arabia and Russia, who are leading the effort, have both voiced their support to extend the agreement. is scheduled to meet officially at its headquarters in Vienna, Austria, on Nov. 30.

The confident sentiment is visible in the way financial traders have positioned themselves.

Hedge funds and other money managers raised their bullish wagers on U.S. crude futures and options in the week to October 24, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

The speculator group raised its combined futures and options position in New York and London by 15,041 contracts to 280,634 during the period.

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