Oil Edges Higher Ahead of Thanksgiving Holiday
November 21 2017 - 5:58AM
Dow Jones News
By Neanda Salvaterra
LONDON--Oil futures held gains Tuesday ahead of the Thanksgiving
holiday and a meeting by major oil producers to discuss a possible
extension of output cuts.
Brent crude, the global oil benchmark, rose 0.48% to $62.52 a
barrel on London's ICE Futures exchange. On the New York Mercantile
Exchange, West Texas Intermediate futures were trading up 0.46% at
$56.67 a barrel.
Major U.S. markets will be closed on Thursday in observance of
the U.S. national holiday.
Prices also received a small boost from the partial shutdown of
TransCanada's Keystone pipeline after an oil spill last week,
analysts said.
"It is still in the range that we have seen last week. We have
the Thanksgiving holidays and some supply disruptions that offer a
bit of support," said Olivier Jakob, managing director at oil
consultancy Petromatrix.
Still, most investors are waiting to see the outcome of the
meeting with the Organization of the Petroleum Exporting Countries
and other producers including Russia that are scheduled to meet
Nov. 30.
The cartel and external producers first agreed a year ago to
reduce global crude output by nearly 2% from peak October 2016
levels in an effort to rein in a supply glut and boost prices.
The deal, which was extended in May, is set to expire in March
but investors are hoping for an extension of the deal through
2018.
While Saudi Arabia has expressed its dedication to extending the
agreement, investors are less sure of Russia's commitment.
Russian Energy Minister Alexander Novak is set to hold talks
with Russian oil companies Tuesday.
In anticipation of the meeting, investors have increased their
net long speculative positions in WTI by 32,000 to 372,000
contracts in the week to Nov. 14, close to the record level
achieved in February 2017.
Net long positions in Brent are already at a record level, said
analysts for Commerzbank.
Some analysts warn that the meeting could result in a surprising
outcome.
"We think there is some danger of a short-term market
disappointment; trader expectations are for a definitive and
conclusive deal, and the reality seems more likely to disappoint
than surprise to the upside," said analysts for Standard Chartered
Bank in a recent note.
Nymex reformulated gasoline blendstock--the benchmark gasoline
contract--rose 0.70% to $1.76 a gallon. ICE gas oil changed hands
at $560.25 a metric ton, up $4.25 from the previous settlement.
Write to Neanda Salvaterra at neanda.salvaterra@wsj.com
(END) Dow Jones Newswires
November 21, 2017 06:43 ET (11:43 GMT)
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