Oil next stop $80 ?

Oil’s poised for a second weekly gain as investors await decisions from a key OPEC meeting that could direct the course of prices while the group closes in on its target of clearing a global glut.

Futures in New York were little changed after climbing above $68 a barrel this week for the first time since 2014.

The results from the OPEC-led output cuts have been “impressive,” and the group will continue to cooperate in 2019, Saudi Oil Minister Khalid Al-Falih said at the opening of the ministerial meeting in Jeddah, Saudi Arabia, on Friday.

OPEC and its allies need to see the marketremain stable for at least several months before any changes to the output curb deal, Russia’s Energy Minister Alexander Novak said.

Crude’s recent rally has been buoyed by fears over supply security in the energy-rich Middle Eastern region as geopolitical tensions continue to simmer.

Now, about 16 months into the historic OPEC-led production cuts, the group is succeeding in shrinking bloated global inventories while being threatened by rising U.S. shale production sparked by higher prices.

With a further advance in prices bringing global benchmark crude to within reach of $80 a barrel, investors are looking for signals from this week’s meeting on whether the Organization of Petroleum Exporting Countries and its allies are satisfied with current prices and are willing to prolong their production cuts.

“I think the underlying tone is that global producers are going to discuss holding the floor, but if they actually suggest a more aggressive baseline for oil prices, that’s going to be really bullish for the market,” Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp., said by phone. “It’s more noise than fact at the moment. We’ll see how the outcome of that meeting comes.”

Source: Bloomberg Pro Terminal

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