Oil rises 2 percent, boosted by potential OPEC deal

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Russia and Saudi Arabia believes that the oil output cut deal would be extended unless the market became balanced, Russian Energy Minister Alexander Novak said. The Russian president, Vladimir Putin, said Wednesday it was possible that a multilateral effort to balance an oversupplied market with production declines could last through the end of 2018.

And although OPEC as a whole is complying with the deal fully, it would be fairer for all parties to comply to their agreed cut levels, said Novak.

“Compliance with the OPEC production cuts was over 100 percent in August (meaning members produced less than their quotas, on average) and USA oil inventories have been declining for several months now, ” said William O‘Loughlin, investment analyst at Australia's Rivkin Securities.

"We are looking beyond the rebalancing of this market, to further institutionalise this strategic partnership between Opec and non-Opec, through the Russian Federation", he said.

Brent crude was down 4 cents, or 0.07 percent, at $55.76 a barrel.

The Saudi share of the Chinese market has markedly decreased in the summer months, after the Saudis started to drastically cut oil exports to select markets to speed up the clearing of the glut in the hope of lifting oil prices.

From OPEC members, Iraq reported total exports for September from the South Oil Co. averaged 3.2 million barrels per day.

"Crude exports from the Middle East to the Asia Pacific region are expected to increase by 7.5 million barrels per day between 2016 and 2040, rising from 14.5 million barrels per day to 22 million barrels per day", he said.

Other factors also weighed on oil prices, including the return to production of Libya's Sharara oilfield on Wednesday after an armed brigade forced a two-day shutdown.

However, concerns linger about growing USA crude exports, due to a hefty WTI discount to Brent prices, which makes US oil more competitive.

On Oct. 2, a cargo of 1.6 million barrels of USA crude oil was received at Paradip port, the first import by India of American oil. The figure was about a third higher than the previous record, set the prior week.

A tropical depression that could grow into a hurricane is forecast to strike the US Gulf Coast late Sunday, potentially shutting down offshore oil and natural gas rigs.

"Riyadh and Moscow are taking part in the implementation of the "OPEC-plus" agreements to reduce global oil production".