Oil prices
rose on Monday to their highest in three weeks, catching a lift from a softer
U.S. dollar and from cautious money managers, as OPEC appeared to be moving
closer to reaching an agreement to cut output when it meets next week.
Brent crude
futures LCOc1 were up 60 cents at $47.46 a barrel by 0928 GMT, having touched
their highest level since Nov. 2, while U.S. West Texas Intermediate (WTI)
futures CLc1 were up 52 cents at $46.21 a barrel.
The dollar
eased off last week's 13-1/2-year highs as Treasury yields nudged lower,
bolstering oil and the broader commodities complex including copper CMCU3 and
gold XAU=.
"Oil is
already more than 1 percent higher on the day, helped by Vladimir Putin’s
belief that an output deal will be reached later this month," OANDA
markets strategist Craig Erlam said.
"While
loose terms may be agreed, I remain skeptical that a full detailed agreement
can be both achieved and carried out by OPEC given the clear differences that
are so evident between certain key members."
President
Putin said he saw no obstacle to non-OPEC member Russia agreeing to freeze oil
output, which at more than 11 million barrels per day is at a post-Soviet high.
Meanwhile,
OPEC members last week proposed a deal for Iran to cap, rather than cut,
output.
Iran has been
one of the main hurdles facing any output curtailment by the Organization of
the Petroleum Exporting Countries, as Tehran wants exemptions to try to
recapture market share lost under years of Western sanctions.
Libya and
Nigeria, whose exports have been hampered by violence, have also asked to be
left out of any deal. A recovery in production from both countries means the
onus to cut rests on Saudi Arabia and its Gulf neighbors.
Barclays
analysts said some form of deal was likely, but warned an agreement could have
little impact.
"We
expect OPEC to agree to a face-saving statement ... (but) U.S. tight oil
producers can grow production at $50-$55 (per barrel) and will capitalize on
any opportunity afforded to them by an OPEC cut," the bank said.
Hedge funds
raised their net holdings of U.S. crude futures and options for the first time
in three weeks in the week to Nov. 15, having delivered one of the largest cuts
on record the previous week. The move highlights the nervousness among investors
about betting heavily on oil in either direction.
REUTERS
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