Oil traded near $69 a barrel on signs of increased drilling by American producers and investor optimism that Saudi Arabia and Russia will fill in potential supply losses from Iran.
Futures were little changed in New York. after gaining 0.6 percent on Friday. Shale explorers added last week the most oil rigs in a month as a pipeline bottleneck in the busy U.S. Permian Basin is encouraging drilling in other areas. Meanwhile. Russian Energy Minister Alexander Novak and his Saudi Arabian counterpart Khalid al-Falih met in Moscow Saturday to confirm their willingness to stabilize prices and react to any changes in the market.
Crude has mostly stayed below $70 a barrel since mid-July as a trade dispute between the U.S. and China threaten global economic growth. Speculation has also been swirling over whether a potential supply gap can be filled as American sanctions curb Iran’s oil exports. Traders are looking for more clarity as the Organization of Petroleum Exporting Countries and its allies meet in Algiers later this week to discuss their output.
“The U.S.-China trade tension restricts oil from rising further. while optimism over Saudi and Russia making up for Iran’s losses is keeping prices from falling lower.“ Ahn Yea Ha. a commodities analyst at Kiwoom Securities Co.. said by phone from Seoul. “It’s important for OPEC and its allies to make sure prices don’t drop excessively and the market’s expecting the upcoming meeting to be a reassurance.“
West Texas Intermediate for October delivery was at $68.93 a barrel on the New York Mercantile Exchange. down 6 cents. at 12:38 p.m. in Seoul. The contract climbed $1.24 to $68.99 last week. Total volume traded was about 52 percent below the 100-day average.
Brent for November settlement traded at $77.98 a barrel on the ICE Futures Europe exchange. down 11 cents. The contract rose $1.26 to $78.09 last week. The global benchmark crude traded at a $9.28 premium to WTI for the same month.