Oil prices climbed on Friday, hovering close to their highest levels in months, as major producers may wait until January before deciding whether to extend their output curbs beyond the first quarter.
Russia’s energy minister said no decision was expected before January, although other ministers suggested such a decision could be taken before the end of this year.
“I believe that January is the earliest date when we can actually, credibly speak about the state of the market,” Russian Energy Minister Alexander Novak said. Other ministers suggested a decision could come this year.
U.S. West Texas Intermediate (WTI) crude futures ended Friday’s session 11 cents higher at $50.66 per barrel, the highest settle since May 24. The contract was up about 1.5 percent on the week, marking the third straight weekly gain.
International benchmark Brent crude futures rose 38 cents to $56.81 a barrel at by 2:18 p.m. ET (1818 GMT). The contract earlier hit $56.87, the highest intraday level since March 1.
Prices were little changed after Baker Hughes reported that oil rigs operating in U.S. fields fell by 5 to a total of 744.
Oil prices have gained more than 15 percent in the last three months, suggesting output cuts of 1.8 million barrels per day by OPEC and other producers have helped clear the global crude glut. Rising global demand has also brought more balance to the market.
“It wasn’t a strong surprise to see that they deferred that decision,” said Tony Headrick, energy market analyst at CHS Hedging LLC in Inver Grove Heights, Minnesota. “Regardless of the OPEC meeting’s outcome, signs are that the market is moving toward balance.”
He pointed to strong demand for distillates, especially European gas oil.
This, he said, “is supporting Brent and in turn is supporting U.S. products and WTI as well.”
Kuwaiti Oil Minister Essam al-Marzouq, who chaired the meeting in Vienna, said the market “is evidently well on its way towards rebalancing.”
Despite their concerted efforts — the oil cartel extended their supply cuts until the end of March — prices have remained depressed amid increasing U.S. oil production.
The Energy Information Administration (EIA) reported on Wednesday that U.S. crude production reached 9.51 million bpd in the week ended Sept.15, up from 8.78 million bpd a week ago.
Hurricanes in the Gulf of Mexico have also pushed up crude oil stocks as some U.S. refineries have been shut by flooding.
Commerzbank said in a note that oil prices were also finding support from the impending tensions around the independence referendum that will be held on Monday in Iraq’s semi-autonomous Kurdish region.