Oil headed for its longest run of gains this year as Libya’s biggest oil field was said to have suffered another outage while Russia signaled it’s weighing an extension of Opec-led production cuts.
Futures gained for a fifth day in New York after advancing 3.2 percent last week following a US military strike on Syria. Libya’s Sharara field stopped producing just one week after it reopened, according to two people familiar with the matter, although it wasn’t clear why. Russia’s energy ministry has been in discussions with oil companies regarding the need to prolong the six-month deal when it expires, Energy Minister Alexander Novak said Friday.
Support from some members of the Organization of Petroleum Exporting Countries to extend the curbs has sparked a rally above $50 a barrel. The cuts have stabilized the market and Russia will continue to watch inventory levels, but it’s too early to decide whether the pact should be prolonged, Novak said. The pipeline carrying crude from Sharara to Libya’s Zawiya refinery stopped operating on Sunday, said the people familiar who asked not to be identified because they’re not authorized to speak to media.
“Libyan production is back to square one,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.
West Texas Intermediate for May delivery rose as much as 38 cents to $52.62 a barrel on the New York Mercantile Exchange and was at $52.59 at 9:39 a.m. in London. Total volume traded was about 12 percent above the 100-day average. The contract gained 54 cents to $52.24 on Friday.
Brent for June settlement climbed as much as 45 cents, or 0.8 percent, to $55.69 a barrel on the London-based ICE Futures Europe exchange. Prices increased 35 cents to $55.24 on Friday. The global benchmark crude was at a premium of $2.67 to June WTI.
Russia, which pledged to trim output by as much as 300,000 barrels a day by the end of this month, will make a decision on prolonging supply curbs after “monitoring results in April and May,” according to Deputy Prime Minister Arkady Dvorkovich. Cuts so far haven’t delivered the expected price boost, he said at an energy ministry conference in Moscow on Friday. While the nation isn’t a member of Opec, Russia and 10 other countries joined the group in cutting output from January.
In the US, companies increased the rig count to the highest since August 2015. US drillers targeting crude added 10 rigs to 672, according to data Friday from Baker Hughes Inc.
Iran reduced light oil pricing for May to customers in Asia, according to an official from state-run National Iranian Oil Co., who asked not be identified because the information is confidential.