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Crude Oil Rallies as Saudi & Russia Talks About Production Cuts Extension

October 5, 2017 at 22:30 by Vladimir Vyun

Crude oil rallied today as Russia and Saudi Arabia signaled that they may extend the limit on their production of crude till the end of the next year. Saudi King Salman bin Abdulaziz was visiting Moscow to discuss, among other things, the extension of the deal between the OPEC members and some non-OPEC countries to cut oil output as a way to buoy prices. Meanwhile, Saudi Energy Minister Khalid al-Falih said on a television:

In the kingdom, we have to keep all options open, President Putin agreed with us on this and expressed his readiness to extend until the end of 2018 if this is agreed, and if this is the best option.

Yesterday, the Energy Information Administration reported that US exports of crude reached a historical record. That reinforced concerns that US producers will increase supply to profit from rising prices, undermining the OPEC effort to reduce global glut. Yet they may face difficulties in pumping more oil as the threat of yet another tropical storm, Nate, led to shutting-off of oil platforms in the Gulf of Mexico.

November contract of WTI crude oil rallied 1.54% to $50.75 per barrel as of 22:12 GMT on NYMEX today. December Brent crude jumped as much as 2.08% to $56.96 per barrel on ICE today.

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