Oil breaks back through $50: Opec said to be on course to agree output-freeze deal

Oil held its advance after the longest run of gains in more than a year as US crude and gasoline stockpiles declined, paring supplies at their highest seasonal level in two decades. Brent rose above $50 a barrel for the first time since July. Futures gained 0.5 per cent in New York after climbing more […]

Oil held its advance after the longest run of gains in more than a year as US crude and gasoline stockpiles declined, paring supplies at their highest seasonal level in two decades. Brent rose above $50 a barrel for the first time since July.

Futures gained 0.5 per cent in New York after climbing more than 12 per cent over the previous five sessions. Crude inventories fell the most in five weeks, while motor-fuel stockpiles slid for a third week, according to data from the Energy Information Administration. Opec is on course to agree to an output-freeze deal because its biggest members are already pumping flat-out, said Chakib Khelil, the group’s former president.

Oil has climbed about 19 per cent since closing below $40 a barrel and slipping into a bear market earlier this month. Russian energy minister Alexander Novak said that the nation was open to discussing a freeze after Saudi Arabian energy minister Khalid Al Falih said informal talks next month may lead to action to stabilise the market. A deal to cap production was proposed in February but a meeting in April ended with no accord.

“Surprisingly large draws in crude and gasoline inventories made prices jump,” said Michael Poulsen, an analyst at Global Risk Management. “Yesterday’s weekly oil inventory report deviated hugely from the consensus.”

West Texas Intermediate for September delivery was at $47.04 a barrel on the New York Mercantile Exchange, up 25 cents, at 9.33am London time. The contract rose 21 cents to close at $46.79 on Wednesday for a fifth day of gains, the longest run since April 2015. Total volume traded Thursday was 2 per cent below the 100-day average.

Brent for October settlement rose as much as 20 cents to $50.05 a barrel on the London-based ICE Futures Europe exchange, before slipping to trade little changed. The contract closed at $49.85 on Wednesday, 19 per cent higher than its August low and near the 20 per cent threshold for a bull market.

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