Oil edges up about 1 percent on optimism over non-OPEC output cuts | Reuters

 Oil edges up about 1 percent on optimism over non-OPEC output cuts
| Reuters

By Devika Krishna Kumar

NEW YORK Oil prices rose about 1 percent on Friday, trading within a narrow range, on hopes that non-OPEC producers meeting in Vienna over the weekend would agree to cut output to bolster the group's own agreement to limit production.Both Brent and U.S crude futures, however, were on track for their first weekly loss in four weeks. A strong U.S. dollar .DXY that makes greenback-denominated crude more expensive to many buyers, pressured oil, keeping both benchmarks nearly 2 percent below the highs reached late last month after the Organisation of the Petroleum Exporting Countries (OPEC) announced plans to cut production. [USD/]On Saturday, OPEC oil ministers will meet non-OPEC producers in Vienna to seek help in curbing a global glut.The price gains were slightly pared after data showed U.S. energy companies this week added 21 oil drilling rigs, the biggest weekly increase since July 2015. [RIG/U]U.S. crude's West Texas Intermediate (WTI) futures CLc1 rose 63 cents to $51.47 a barrel, a 1.2 percent gain by 1:44 p.m. EST (1844 GMT), trading narrowly between $50.86 and $51.66

Brent crude LCOc1 futures rose 30 cents to $54.19 a barrel, a 0.6 percent gain, after dealing between $53.77 and $54.46.Many market watchers questioned how willing non-OPEC countries could be to cut output. Russia has said it would cut 300,000 barrels per day, meaning other non-OPEC producers combined would need to pledge the same amount to lower output by the 600,000 bpd OPEC wants. Russia's No.2 oil producer Lukoil said it was ready to take part in output cuts.Azerbaijan and Kazakhstan have also expressed willingness to cut output.

Russia plans to hold more talks on Friday with some OPEC and non-OPEC nations about unresolved issues, two Russian sources told Reuters. However, Energy Minister Alexander Novak said there would be no oil talks with OPEC on Friday night."We see event odds as skewing towards a slightly positive price impact," Macquarie Research analysts said in a note."That said, we believe a status quo outcome that keeps the November deal intact is the most probable scenario and hinges on a repeated commitment from Russia (300,000 bpd). In addition to potential cuts from Oman, this scenario could also include softer commitments due to natural declines (e.g. Mexico) or other less credible cuts."

Mexico could contribute as much as 150,000 bpd to the non-OPEC oil cuts, a source told Reuters.OPEC last week agreed to slash production by 1.2 million bpd in the first half of 2017. Saudi Arabia and Iraq plan to supply full contracted volumes of crude to Asia in January, in an effort to retain market share in Asia, but Saudi Arabia ordered supply cuts to U.S. and European buyers. (Additional reporting by Libby George in London, Osamu Tsukimori; in Tokyo; Editing by Marguerita Choy and Adrian Croft)

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Updated Date: Dec 10, 2016 01:00:09 IST