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Oil prices narrowly higher as producers discuss extending output pact

25 September 2017

Kuwaiti Oil Minister Essam al- Marzouq, who chaired Friday's meeting of the Joint Ministerial Monitoring Committee, said output curbs were helping cut global crude inventories to their five-year average, OPEC's stated target.

Nigeria was first granted production cuts at the November, 2016 Ministerial Conference and this was later extended in May at another Ministerial Conference, until the country stabilizes its crude oil production.

OPEC members met Friday ahead of.

U.S. West Texas Intermediate (WTI) crude settled at $50.66 a barrel, up 11 cents or 0.2 percent, within a few cents of its May peak.

Global crude prices rose amid a falling number of drilling rigs in the U.S. and news that Iraq expressed support for a decision to extend a deal between OPEC and non-OPEC nations to cut output.

What remains in the interim, however, is a stubbornly range-bound market despite Friday's positive performance, and this frustrates billionaire shale oil man Harold Hamm, who complained to Bloomberg that the US government was too optimistic in predicting over 1 million new barrels per day in USA production and that this is "distorting" global crude prices.

Tony Headrick, energy market analyst at CHS Hedging LLC in Inver Grove Heights, Minnesota, said "the market is moving toward balance". This, he said, "is supporting Brent and in turn is supporting USA products and WTI as well".

The WTI crude front month discount to the same month of Brent futures hit 6.28 dollars, the widest since August 2015, as U.S.crude was pressured by hurricane damage to USA refineries.

"Oil is relatively underpriced compared with other markets, but any steep rise would be offset by rising shale oil production", said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

The closely-watched Baker Hughes rig count was on track for a second month of losses in a row and its biggest monthly decline since May 2016.

During the session, the discount of WTI to Brent futures hit its widest since August, 2015 as US crude was pressured by hurricane damage to USA refineries.

Oil prices narrowly higher as producers discuss extending output pact