Oil heads for gains

File photo: Hasan Jamali.

File photo: Hasan Jamali.

Published Apr 10, 2017

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London - Oil headed for its longest run of gains this

year as Libya’s biggest oil field suffered another outage while Russia signalled

it’s weighing an extension of OPEC-led production cuts.

Futures gained for a fifth day in New York after

advancing 3.2 percent last week following a US military strike on Syria.

Libya’s Sharara field halted just one week after reopening, with the National

Oil Corpopration declaring force majeure on exports, according to a copy of its

decree obtained by Bloomberg.

In Russia, Energy Minister Alexander Novak said

Friday his ministry had been in talks with oil companies regarding the need to

prolong the six-month deal with OPEC.

Support from some members of the Organization of

Petroleum Exporting Countries to extend the curbs has sparked a rally above $50

a barrel.

The cuts have stabilised the market and Russia will continue to watch

inventory levels, but it’s too early to decide whether the pact should be

prolonged, Novak said.

In OPEC nation Libya - exempt from the agreement -

Sharara had been pumping 200 000 barrels a day before the latest disruption,

according to the NOC. A week earlier, exports were interrupted by a pipeline

halt.

“Libyan production is back to square one,” said Giovanni

Staunovo, an analyst at UBS Group in Zurich.

West Texas Intermediate for May delivery rose as much as

58 cents to $52.82 a barrel on the New York Mercantile Exchange and was at

$52.75 as of 12:48 p.m. London time. Total volume traded was about 5 percent

above the 100-day average. The contract gained 54 cents to $52.24 on Friday.

Brent for June settlement climbed as much as 63 cents, or

1.1 percent, to $55.87 a barrel on the London-based ICE Futures Europe exchange

after advancing 35 cents on Friday. The global benchmark crude was at a premium

of $2.65 to June WTI.

Russia, which pledged to trim output by as much as 300 000

barrels a day by the end of this month, will make a decision on prolonging the

curbs after “monitoring results in April and May,” according to Deputy Prime

Minister Arkady Dvorkovich.

Cuts so far haven’t delivered the expected price

boost, he said at an Energy Ministry conference in Moscow on Friday. While the

nation isn’t a member of OPEC, Russia and 10 other countries joined the group

in cutting output from January.

BLOOMBERG

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