Oil prices settle above $51 as Opec deal optimism abounds

Jessica Morris
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Opec could cut output for the first time in eight years (Source: Getty)

Oil prices hit a four-month high today as investors felt increasingly optimistic about the ability of Opec to agree its first production cut in eight years.

Brent crude, the global benchmark, rose 0.45 per cent to $51.12 per barrel in late afternoon trading. West Texas Intermediate crude swelled 0.08 per cent to $48.85.

Investor sentiment has brightened since the Organisation of the Petroleum Exporting Countries (Opec) provisionally agreed to cut output to between 32.5m and 33m barrels per day.

Read more: Oil rises above the $50 per barrel marker, buoyed by Opec optimism

Analysts have expressed doubts over the oil cartel's ability to co-ordinate action. Even if it does, they remain sceptical over whether a deal will accelerate the chronically oversupplied market's recovery.

But others have said that if enough non-Opec members get on board with the oil cartel's plan then "prices can only go higher".

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Iran, which would be allowed to produce "maximum levels that make sense" as part of the oil cartel's deal, said today that co-operation between Opec members and non-Opec members would play an important part in stabilising oil prices.

Iran's energy ministry is sending a delegation to Russia in October-November to present potential oil deals to Russian companies.

Russian news agency Interfax reported today that Russian energy minister, Alexander Novak, said that Russia and Saudi Arabia would determine a date for their respective energy ministries to meet in the near future.

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