Oil headed for the biggest weekly advance since August as Russia said talks with Iran are continuing before a planned producer meeting next month on a proposed output freeze amid a global glut.
Futures slipped 0.5 percent in New York, paring an 11 percent gain for the week. The output cap agreed with Saudi Arabia will need to be in place for a minimum of 12 months to support prices, Russian Energy Minister Alexander Novak said Thursday. A meeting with the Iranian Oil Minister is possible next month, he said. Iran, seeking to boost exports after sanctions were lifted, said the deal is “ridiculous,” while Iraq said a pact hinges on unified support.
Crude is still down 11 percent this year on speculation a worldwide surplus will be prolonged amid rising U.S. stockpiles that have swelled to the highest level in more than eight decades and the outlook for increased shipments from Iran. Producers are in discussions about a site for a meeting next month on the production freeze, Venezuelan Oil Minister Eulogio Del Pino said during a television broadcast on TeleSur.
“Oil is stabilizing above $30,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “U.S. production cuts are by far the most likely source of further price support for the oil market, rather than any talks between Venezuela, Russia and other producers.”
West Texas Intermediate for April delivery was at $32.91 a barrel on the New York Mercantile Exchange, down 16 cents, at 9:18 a.m. Hong Kong time. The contract rose 92 cents, or 2.9 percent, to $33.07 on Thursday. Total volume traded was 34 percent below the 100-day average. Prices are set for a second weekly gain.
Brent for April settlement, which expires Monday, was 41 cents lower at $34.88 a barrel on the London-based ICE Futures Europe exchange. Prices climbed 88 cents, or 2.6 percent, to $35.29 on Thursday and are up 5.6 percent for the week. The global benchmark crude was at a premium of $1.97 to WTI. The more-active May futures fell 43 cents to $35.27 a barrel.