Oil hits one-year high as Russia ready to join output caps

Mon Oct 10, 2016 3:22pm EDT
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices jumped as much as 3 percent on Monday, with Brent hitting a one-year high, after Russia said it was ready to join OPEC in curbing crude output and Algeria called for similar commitments from other non-OPEC producers.

Sentiment was also boosted by a rally in Wall Street shares .SPX and news that work was underway for the launch of the first sovereign bond issue of No. 1 crude exporter Saudi Arabia before the eventual listing of the kingdom's state-oil company Aramco.[FRX/]

Brent crude LCOc1 hit its highest level since Oct. 9, 2015, reaching $53.73 a barrel, before paring gains to settle $1.21, or 2.3 percent higher at $53.14 a barrel.

U.S. West Texas Intermediate crude CLc1 rose to its highest since June 9 at $51.60, before easing to end the session at $51.35, up $1.54, or 3.1 percent.

Russian President Vladimir Putin said an output freeze or even a production cut were likely the only right decisions to maintain energy sector stability.

"Russia is ready to join the joint measures to cap production and is calling for other oil exporters to join," Putin said, speaking at an energy congress in Istanbul.

The Organization of the Petroleum Exporting Countries aims to agree on cutting about 700,000 barrels per day, bringing its output to 32.5-33.0 million bpd by the time it meets in Vienna for its policy meeting on Nov. 30.

It will be OPEC's first output reduction in eight years and comes two years after prices crashed from highs above $100 a barrel. OPEC has also asked Russia and other non-members to join in making cuts.   Continued...

Flames emerge from a pipeline at the oil fields in Basra, southeast of Baghdad, September 30, 2016. REUTERS/Essam Al-Sudani