Oil hovers around $45 as Opec plans formal meeting in Algiers

London: Oil climbed near $45 a barrel after Algeria said Organisation of Petroleum Exporting Countries (Opec) may turn its informal talks next week into a formal session and as weekly industry data showed United States crude inventories declined.
November futures rose by as much as 2.5 per cent in New York. Opec ministers can transform the gathering into an extraordinary meeting since they will all be present, Algerian Energy Minister Noureddine Bouterfa said on public radio.
Supply needs to be cut by 1 million barrels a day to rebalance the market and stabilise prices, he said. US crude stockpiles dropped by 7.5 million barrels last week, the American Petroleum Institute was said to report on Tuesday.
Oil has fluctuated since rally in August on speculation the Opec and Russia will agree on ways to stabilise the market at the meeting. While Venezuelan President Nicolas Maduro said members are close to a deal, all but two of 23 analysts surveyed predict an agreement to limit production is unlikely. A deal to freeze output was proposed in February but a meeting in April ended with no final accord.
“The chances of something happening are increasing,” said Jamie Webster, a fellow at the Center on Global Energy Policy at Columbia University in New York. “It’s still not likely to be a substantive agreement. But we are moving in the right direction to where they might actually do something.”
West Texas Intermediate for November delivery rose as much as $1.09 to $45.14 a barrel on the New York Mercantile Exchange and was at $45.02 in London. The October contract expired Tuesday after advancing 14 cents to close at $43.44. Total volume traded was in line with the 100-day average.
Brent for November settlement rose as much as 90 cents, or 2 per cent, to $46.78 a barrel on the London-based ICE Futures Europe exchange. Prices dropped 7 cents, or 0.2 per cent, to $45.88 a barrel on Tuesday. The global benchmark traded at a $1.69 premium to WTI.
Supply glut
The US crude stockpiles probably increased by 3.25 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report on Wednesday. Inventories at Cushing, the delivery point for WTI, probably rose by 100,000 barrels.
Opec will hold an informal meeting on September 28 after the closing session of the International Energy Forum conference, Bouterfa said. Oil needs another six to nine months to stabilize within a range of $50 to $60 a barrel, he said. - Bloomberg News