Oil Up 2%, Brent Hits $60/Bbl On Support For Extending Curbs



Reuters

NEW YORK, Oct 27 (Reuters) - Oil prices jumped about 2 percent on Friday, with global benchmark Brent crude rising above $60 per barrel, on support among the world's top producers for extending a deal to rein in output and as the dollar retreated from three-month peaks.

Ahead of OPEC's policy meeting on Nov. 30, Saudi Arabia and Russia declared their support for extending an OPEC-led deal to cut supplies for another nine months, the Organization of the Petroleum Exporting Countries' secretary general said. The pact currently runs to March 2018.

Brent futures rose $1.14, or 1.9 percent, to settle at $60.44 a barrel after hitting a session peak of $60.53, the highest since July 2015 and more than 35 percent above 2017 lows touched in June.

U.S. West Texas Intermediate crude oil (WTI) ended the session up $1.26, or 2.4 percent, at $53.90 after reaching a session peak of $53.98 a barrel, the highest since early March.

For the week, Brent was 4.6 percent higher, notching its third straight weekly gain. U.S. crude rose 4.7 percent for the week.

U.S. crude's gains have lagged the global benchmark amid rising domestic output.

U.S. drillers added one oil rig in the week to Oct. 27, but the rig count fell by 13 for the month, the biggest such decline since May 2016, data showed on Friday.

Oil prices have been hovering near their highest levels for this year amid signs of a tightening market, renewed support this week of an extension of production cuts and tensions in Iraq.

However, the announcement on Friday of a ceasefire between Iraqi forces and the Peshmerga from the country's autonomous northern Kurdish region eased some concerns.

"What is interesting is that the pop in WTI futures moved above the Sept. 28 high," said David Thompson, executive vice president at Powerhouse, an energy-specialized commodities broker in Washington.

"So even though the dollar is giving back some of its move, crude may now be trading off of a new driver, the technical breakthrough to a new high."

The dollar trimmed its earlier gains versus a basket of currencies following a Bloomberg report that U.S. President Donald Trump is leaning toward Federal Reserve Governor Jerome Powell as his pick to head the U.S. central bank.

A weaker dollar makes greenback-denominated commodities, including oil, cheaper for holders of other currencies.

"I think the combination of short-covering and Chevron and Exxon both missing their production guidance for the third quarter has resulted in the market strength today," said Scott Shelton, energy futures broker with ICAP in Durham, North Carolina.


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