Investing.com -- Crude oil prices retraced slightly on Friday after touching their highest in two months, amid reports that OPEC and its allies are closing in on an agreement to extend and tighten their current agreement on output restraint.
Prices were also supported at the margins by comments from President Donald Trump, who told Fox News that a ‘phase-1’ trade deal with China was close, despite plenty of signs to the contrary over the last week.
The effect of Trump’s optimism was limited, however. Energy Intelligence analyst Abhi Rajendran noted that “there is at least $5 of this in the oil price today already.”
By 9:30 AM ET (1430 GMT), Brent futures, the global benchmark, were unchanged on the day at $63.97 a barrel.
U.S. crude futures were at $58.39 a barrel, down 0.3% on the day but up around 1.2% from the start of the week. The contract is thus on track for a third straight weekly gain, reflecting hopes that the so-called OPEC+ group of producer nations will extend their output restraint deal for at least another three months beyond the current scheduled end of March 31 next year.
The group is due to convene in Vienna on Dec. 5 and 6 to review its existing arrangement, which aims to keep 1.2 million barrels a day of output off world markets. While that target has been broadly honoured for most of the last year, the aggregate total masks the fact that OPEC members Iraq and Nigeria have both produced above their quotas.
"A disciplined approach from Iraq and Nigeria should shave off another 300-400,000 barrels per day (bpd) from the group’s production level leading to a balanced market in the first half of 2020 and to a possible supply deficit in the second half of 2020," Reuters quoted oil brokerage PVM as saying.
Elsewhere, gasoline RBOB futures were unchanged at $1.7045 a gallon, while Natural Gas futures were at $2.62 per 10,000 MMBtu, their highest since Tuesday.