Dubai
Oil prices may get support for now until the official Opec meeting next month.
On the back of an expected supply freeze between the Opec members of 32.5-33.0 million barrels per day, oil prices have gained more than $10 (Dh36.7) per barrel. The details of the deal, like the production levels for each member, are expected to be worked out in late November. Russia has also agreed to join the production cuts.
“The range is strictly going to be a little bit higher than previous. Brent crude is likely to be in the range of $50-55 (per barrel) level, and WTI would be slightly lower, and in the range of $46-53,” Vaqar Zuberi, head of research, Portfolio Manager — Multi Manager Funds at Mirabaud Asset Management told Gulf News.
On Friday, Brent crude for immediate delivery closed 0.78 per cent higher at $51.78 per barrel, while West Texas Intermediate closed 0.43 per cent higher at $50.85.
Optimistic:
The current down cycle in oil is coming to an end, with fundamentals beginning to improve, Saudi energy minister Khalid Al Falih said on Sunday in Riyadh.
“We are optimistic that oil prices will continue to improve in the future,” Falih said on the sidelines of a conference, where he was joined by ministers from Kuwait, Bahrain, Qatar and the United Arab Emirates for oil talks.
But for prices to break the upside, analysts say they still need more action.
“The range on oil price is still fairly established. We don’t see a fundamental reason for oil to break out on the upside very soon, unless there is a fundamental change in demand or supply,” said Zuberi.
“We view the risk reward before and especially after the November meeting as being skewed to the downside. This in the belief that a deal to cut production will only be successful if it is followed up by a clear guidance as to how it will be policed,” said Ole Hansen, head of commodity strategy at Saxo Bank.
