Oil slipped from the highest close in more than two years after U.S. drillers expanded operations while OPEC and Russia prepare to discuss longer supply curbs.
Futures slid 0.8 percent in New York after rising 1.6 percent Friday to the highest since June 2015. OPEC and Russia, a partner in the oil-cuts deal, have crafted the outline of an agreement to extend curbs to the end of next year, according to people involved in the discussions. In the U.S., drillers targeting crude added nine rigs last week, Baker Hughes data show.
Oil has advanced about 24 percent since the start of September on speculation the Organization of Petroleum Exporting Countries and its allies will prolong output reductions to drain a global glut. Russia had been hesitating over agreeing to extend cuts at the Nov. 30 OPEC meeting in Vienna because the current deal doesn’t expire until the end of March.
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The “market has placed all chips on the long side, betting on an extension of OPEC and non-OPEC production cuts,†said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. “As such, the market is rigged for disappointment, with a possible short-term sell-off†if OPEC disappoints.
West Texas Intermediate for January delivery was at $58.51 a barrel on the New York Mercantile Exchange, down 44 cents, at 10:22 a.m. London time. Total volume traded was about 24 percent above the 100-day average. Prices gained 93 cents to $58.95 on Friday, capping a 4.2 percent weekly advance.
Brent for January settlement fell 21 cents to $63.65 a barrel on the London-based ICE Futures Europe exchange, after rising 1.8 percent last week. The global benchmark crude traded at a premium of $5.11 to WTI.
OPEC and Russia are still hammering out crucial details for an extension, the people involved in the conversations said last week. Russia wants the deal to include new language that would link the size of the curbs to the health of the oil market, they said.
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