Crude holds above $50 as Russia sends mixed signal on output cut

Hong Kong: Crude oil held above $50 a barrel amid uncertainty over Russia’s willingness to join Organisation of Petroleum Exporting Countries (Opec) efforts to stabilise the market.
Futures were little changed in New York after declining 1.1 per cent. Russia’s largest producer Rosneft questioned the need for it to reduce output, after President Vladimir Putin had earlier said his nation would join the Opec in limiting production. The comment from Rosneft chief executive officer Igor Sechin doesn’t contradict Putin’s stance on a supply deal, the Kremlin said.
Oil rose to a 15-month high on Monday after Saudi Arabia expressed optimism that a deal could be finalised to cut output and Russia signaled support. While Saudi Arabia’s oil minister left Istanbul before a producer meeting on Wednesday, Opec secretary-general Mohammed Barkindo said most of the work on an accord was already done and countries including Russia, Azerbaijan, Algeria and Venezuela will still meet to "compare notes.” Opec supply quotas will be decided at the group’s official gathering late next month in Vienna.
"The lead up to the November Opec meeting could see some volatility amid doubts about a supply deal,” said Angus Nicholson, a market analyst in Melbourne at IG. "I don’t think a drop below $45 is likely given the potential upside shock of a supply agreement coming together.”
West Texas Intermediate for November delivery was at $51.12 a barrel on the New York Mercantile Exchange, up 33 cents, in London. The contract declined 56 cents to $50.79 on Tuesday, falling from the highest close since July 2015. Total volume traded was about 52 per cent less than the 100-day average. Prices rose 7.9 per cent last month.
Russian support
Brent for December settlement rose 40 cents to $52.81 a barrel on the London-based ICE Futures Europe exchange. The contract dropped 73 cents to $52.41 on Tuesday. The global benchmark was at a $1.25 premium to December WTI.
An output freeze or cut is probably the only proper move to preserve stability in the global energy market, Putin said Monday at the World Energy Congress in Istanbul. Russia is ready to coordinate oil production limits with Opec when the group makes a final supply agreement, Kremlin spokesman Dmitry Peskov told reporters on a conference call.
Saudi Arabian Oil Minister Khalid Al Falih and his Russian counterpart Alexander Novak will meet again for further consultations in Riyadh later this month, according to a statement from the Saudi Energy Ministry.
Supply and demand could come back into balance earlier than expected if Opec’s agreement to curb output is implemented, the International Energy Agency said on Tuesday.