West Texas Intermediate and Brent crudes climbed after OPEC’s Secretary General said the group may cut output targets next year.
Abdalla El-Badri said today that the Organization of Petroleum Exporting Countries’ production quota could fall 500,000 barrels a day to 29.5 million barrels a day next year. El-Badri was speaking at OPEC’s secretariat in Vienna after talks with Russian Energy Minister Alexander Novak today. WTI has tumbled 13 percent since touching $107.73 a barrel on June 20 as Asian and European economies have showed signs of slowing while crude output gained.
“After the significant decline in prices, investors were looking for a reason to get into the market and El-Badri’s comments gave them that,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by phone. “El-Badri said this was an outlook not a decision, but the market is still taking it as a positive sign.”
WTI for October delivery rose 73 cents, or 0.8 percent, to $93.65 a barrel at 10:39 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 11 percent above the 100-day average for the time of day. Prices have decreased 4.8 percent this year.
Brent for November settlement increased 93 cents, or 1 percent, to $98.81 a barrel on the London-based ICE Futures Europe exchange. Volumes were 6.1 percent lower than the 100-day average. The October contract expired yesterday, falling 46 cents to $96.65 a barrel.