Oil prices rose ahead of a critical meeting of two dozen oil producers on Thursday, reversing a three-day slide as uncertainty over an extension to the group’s deal to limit production weighed on the market.
OPEC and other oil exporters led by Russia have kept 1.8 million barrels a day off the market since January, helping to boost crude prices about 40 percent from the lows of the year. The producers are meeting in Vienna on Thursday to discuss extending the deal.
Traders entered the week confident that the group would extend the agreement by nine months through the end of 2018. But ministers have sent mixed messages, with Russia’s hesitance to agree to a nine-month extension emerging as the main obstacle.
OPEC members have agreed in principal to a nine-month extension, but Russia and the 14-member cartel were still working out key technical details of an agreement on Thursday, sources told Dow Jones.
Brent crude oil for January delivery was up 82 cents, or 1.3 percent, at $63.93, trading near a nearly 2½-year high. That contact expires on Thursday. The more heavily-traded February contract was at $63.06.
U.S. West Texas Intermediate crude was up 29 cents, or half a percent, to $57.59. It has fallen more than $1 a barrel since last week, pressured by a faster-than-expected restart to the Keystone pipeline and a rise in U.S. stockpiles of gasoline and distillate fuels.
U.S. crude intraday
Oil futures came under pressure on Tuesday after sources told Reuters the group is considering a nine-month extension, but with a review of the deal in June. That left many oil market watchers with the impression producers had settled on a de facto three-month extension.
Oil futures extended losses on Wednesday after Russian Energy Minister Alexander Novak declined to say whether he supported a nine-month extension following a meeting of countries tasked with monitoring compliance to the agreement.
Russia is reportedly concerned that a nine-month extension could cause markets to quickly tighten, leading to undersupply that results in a price spike. Another concern is that higher prices will cause the Russian ruble to appreciate, which could hurt the country’s exports.
By Wednesday, a six-month extension was still on the table, ministers said. An OPEC watcher told CNBC there is also an idea under discussion to replace the current agreement with one that starts Jan. 1 and runs through the end of 2018. That could include new rules on production levels for some countries and possibly include now exempt nations.