• Sunday, May 19, 2024
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BusinessDay

Oil rebounds on China rates move

Nigeria Oil and gas industry

Brent crude oil rose by $1 to above $80 a barrel after China cut interest rates and on speculation that OPEC could agree to reduce oil production.

China’s central bank cut its benchmark interest rates for the first time in more than two years to reduce borrowing costs and support an economy on track for its slowest annual growth in 24 years.

The rate cut added to a positive mood among oil traders, many of whom expect an agreement by the Organization of the Petroleum Exporting Countries on 27 November to trim production.

Brent rose $2.28 to a high of $81.61 a barrel before easing back to trade at $80.30, a rise of 97 cents.

The North Sea crude oil benchmark looked on course for its first weekly rise since September after eight consecutive weeks of falls.

US crude was up 58 cents at $76.43 a barrel.

There was increasing speculation that OPEC would move to reduce its output to reverse a market collapse that has knocked almost 30 percent off crude oil prices since June.

Venezuela reiterated its call for production cuts, with Foreign Minister Rafael Ramirez saying it was willing to curb its own output if OPEC agreed to reduce production at its gathering.

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Russia’s Foreign Ministry said Russia and Saudi Arabia had expressed “a willingness to cooperate on issues related to energy and oil markets”.

Its energy minister also said Russia might cut oil production to shore up flagging prices, although its ability to change output was limited and no decision had been made yet.

Investors kept a wary eye on talks in Vienna between Iran and the big world powers over Tehran’s nuclear programme.

Sharp divisions remain at the talks, which could result in the tightening, or ending, of sanctions that have severely restricted the Islamic state’s oil exports.