Oil prices continued their upward move since Friday on expectations that Opec would agree to a production cut at their next meeting. The rise came despite the US dollar’s continued move higher, which usually has a negative effect on commodities traded in dollars.
Futures for West Texas Intermediate, the US oil benchmark, were up more than 1.5 per cent in early trading, while futures for Brent crude, the North Sea benchmark, were also up by a similar percentage.
Opec, the cartel of oil producing countries, is set to meet on 30 November in Vienna. Markets are reacting to comments by Russian President Vladimir Putin at the Asia-Pacific Economic Cooperation meeting in Peru’s capital, Lima.
Putin said that there was a good chance of an agreement on an output cut at the meeting. Russia is not a member of Opec, but is one of the world’s largest oil-producing nations.
Putin’s comments add to those of the Iranian oil minister, Bijan Zanganeh, who on Saturday said that it was “highly probable” that a production cut could be agreed.
Opec provisionally agreed to freeze production at a September meeting in Algiers, Algeria, though it has yet to be finalised.
That agreement followed months of disagreement, as countries led by Saudi Arabia aimed to force others to lower production by keeping output high.
Although the dollar was down by 0.25 per cent against a basket of currencies in Monday trading, it was still trading near 13-year highs.