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London - Oil climbed to the highest level in three months in New York as traders continued to assess last week’s change in OPEC policy.
US crude futures rose as much as 1.3% after advancing 8.5% last week. While OPEC outlined an accord to reduce production by as much as 750 000 barrels a day, its third-largest member Iran wants to increase exports to 2.35 million barrels a day in the coming months, state news agency IRNA reported.
The OPEC member is currently shipping 2.2 million barrels a day. Rigs targeting crude in the US rose a fifth consecutive week to the highest level since February, Baker Hughes Inc. said on its website on Friday.
Oil capped the biggest monthly gain since April after the Organisation of Petroleum Exporting Countries (OPEC) agreed to trim supply for the first time in eight years. While quotas will be decided at the group’s official meeting in November, Nigeria and Iran have said they are exempt and Iraq has said it doesn’t accept OPEC’s estimates of its production levels. Russia boosted output last month to a post-Soviet record.
"The real significance of last week’s framework OPEC production agreement is not the size of the implied or actual output cut, but the fact that Saudi Arabia and OPEC have returned to active market management,"said Mike Wittner, head of oil market research at Societe General.
"It is difficult to overstate the importance of this change."
West Texas Intermediate for November delivery rose as much as 63 cents at $48.87 a barrel on the New York Mercantile Exchange, the highest since July 5, at traded at $48.63 at 12:01 London time. The contract gained 41 cents to $48.24 on Friday. Total volume traded was about 10% below the 100-day average. Prices rose 7.9% in September.
Brent for December settlement was 38 cents higher at $50.57 a barrel on the London-based ICE Futures Europe exchange.
The November contract fell 18 cents to expire at $49.06 on Friday, while the December contract closed at $50.19. The global benchmark traded at a $1.39 premium to December WTI.
Iran could boost output to 4.1 million or 4.2 million barrels a day from 3.7 million currently, yet further increases will take time, Paolo Scaroni, vice chairman of NM Rothschild & Sons and former chief executive officer of Eni, said in a Bloomberg television interview.
Production increases from Iran, Nigeria and Libya offset lower output from Saudi Arabia last month, meaning overall OPEC production held steady, according to Vienna-based consultant JBC Energy GmbH.
Oil-market news:
US drillers added seven rigs during the week ended Sept. 30, increasing the count to 425, according to Baker Hughes. The US is pumping at a rate of 8.5 million barrels a day, weekly data from the Energy Information Administration show.
Russian output climbed to 11.11 million barrels a day in September, according to data from the Energy Ministry’s CDU-TEK unit. Investors increased their long position in WTI by 24 131 futures and options during the week ended September 27, according to the Commodity Futures Trading Commission.
Bets on falling prices dropped. Net-bullish positions in Brent crude fell 21 924 contracts, to 290 178, according to ICE data.
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