Oil jumps on efforts to boost prices

OPEC                  AFP  Getty Images

As if to validate Brennock's outlook, Alexander Novak, energy minister for Russian Federation, stated in an interview with TASS published Friday that producers and consumers were comfortable with current oil prices.

The global benchmark, Brent crude, steeply increased on the same day to $59.26 per barrel after closing at $58.12 last Wednesday.

The Canadian production cuts are meant to lift the price for WCS, which just a couple of months ago traded at a discount of more than $50 a barrel to WTI.

"We are going to survey together the market situation with Saudi Arabia and respond to it operationally", he said.

That has left Brent was down about 12% so far this year, as surging oil production in the US, Russia and among key members of OPEC has helped to create a glut in global markets.

US oil production surged to a new record in September, adding more pressure on OPEC and its allies to cut supply at next week's meeting.

Oil also received support from an announcement by the Canadian province of Alberta that it would force producers to cut output by 8.7 percent, or 325,000 barrels per day (bpd), to deal with a pipeline bottleneck that has led to crude building up in storage.

Still, on Thursday, citing two industry sources, Reuters reported that Russian Federation is becoming more convinced that it needs to reduce oil output along with OPEC, but that it is "still bargaining" with Saudi Arabia, the group's biggest oil producer, over when and by how much to cut.

What's more, the market is focusing on the news of any meeting between officials from China and the United States aiming at seeking solution to the trade tensions after the Group of 20 (G20) Summit, held in Buenos Aires, Argentina from Friday to Saturday.

On January 1 this year, petrol went up with 5 cents per liter, while diesel went up with 12 cents, as part of a plan initiated by the government of François Hollande, and followed by Emmanuel Macron, in an attempt to encourage auto users to look for greener alternatives.

Russia, one of the world's major crude producing nations, has been bargaining with Opec's leader, Saudi Arabia, over the timing and volume of any reduction.

In Europe, January Brent crude futures which expired at the end of the session, lost 80 cents, or 1.3%, to $US58.71 a barrel.

Meanwhile, Qatar's energy minister said the country would leave from January and thereafter would not be committed to any agreements by the group.

In addition, Putin agreed to visit Saudi Arabia in 2019, as Peskov said. The pact prompted a rally in riskier assets, including oil, as fears over the economic fallout of the trade war ease.

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