Brent oil tops $60 for first time since 2015 amid OPEC optimism

Bloomberg

Brent surged above $60 a barrel for the first time in more than two years amid enthusiasm that OPEC may extend its supply-restraint
deal and indications that the situation between Iraq and the Kurds
remains fragile.
The global benchmark jumped to levels last seen in July 2015 and crude in New York closed near an eight-month high. Saudi Arabian Crown Prince Mohammed bin Salman this week backed the extension of production cuts by OPEC beyond March, fueling optimism. At the same time, crude flows from Iraq to Ceyhan, Turkey, remain below normal levels and a US spokesman said the Kurds and Iraqis haven’t reached an official cease-fire.
“The Saudis keep pressing for an extension of the output-cut deal through next year, so the market is feeding off that, and we are seeing signs of tightening,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said in a telephone interview. “The Iraq-Kurd situation is also getting the attention of the market. The volumes are down out of Ceyhan. This is not resolving itself as quickly as it looked like it might have been.”
Brent for December settlement jumped $1.14 to end the session at $60.44 a barrel on the London-based ICE Futures Europe exchange. Prices are up 4.7 percent this week. The global benchmark traded at a premium of $6.54 to West Texas Intermediate. WTI for December delivery added $1.26 to settle at $53.90 a barrel on the New York Mercantile Exchange. Total volume traded was near the 100-day average. Prices rose 4.7 percent this week.
“This seems to be a carry-forward of this bullish momentum we’ve been seeing. The overall consensus towards crude is a little more positive,” Ashley Petersen, lead oil analyst at Stratas Advisors in New York, said in a telephone interview. It seems that “crude’s going to remain healthy through the end of the year.”

MARKET ‘BALANCING’
Both the global benchmark and its US counterpart have rallied in October amid increasing belief that the Organization of Petroleum Exporting Countries will agree to cut output later into next year, helping to work down global inventories. Statoil ASA’s Chief Executive Officer Eldar Saetre said in a Bloomberg Television interview that he continues to see strong demand and the oil market is “definitely balancing.”
“People are starting to price in the OECD inventories moving back towards normalized levels into later 2018,” Brad Hunnewell, senior equity analyst at Rockefeller & Co., said by telephone. WTI rallied immediately after US Army Colonel Ryan Dillon, a spokesman for Operation Inherent Resolve, the US-led coalition against the IS, said in a Twitter message that he “incorrectly” said in an interview with Kurdish Rudaw news agency that there was a cease-fire between Iraqi and Kurdish forces. Iraqi Prime Minister Haider Al-Abadi suspended operations by federal forces for 24 hours in disputed areas to allow a joint Iraqi and Kurdish team to deploy forces, Sumaria TV reported.
The Standard & Poor’s 500 Energy Index was up by the most in almost two weeks, with Cabot Oil & Gas Corp., EQT Corp. and Chesapeake Energy Corp. leading the pack. As earnings season kicked off, Exxon Mobil Corp. and Chevron Corp. reported lower production compared with third-quarter estimates. Total SA posted the highest earnings from pumping oil and gas in more than two years, and its Chief Executive Officer Patrick Pouyanne said the imbalance between crude supply and demand is finally dissipating.