Futures Movers: Oil prices are up modestly as Saudis still skeptical of OPEC coalition cuts

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Markets/commodities reporter

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Oil prices crept higher in early Friday trading as Saudi Arabia said it remained skeptical of an agreement among major producers to cut output given Russia’s trepidation.

OPEC deliberated for a second day as the Saudis — the de facto leaders of OPEC — are trying to convince the Russians to join a significant production cut that would help soak up a global oil supply glut.

Arriving at the meeting, Saudi Arabia’s Energy Minister Khalid al-Falih said he wasn’t confident a deal would be reached, the Wall Street Journal reported. And speaking as he arrived to join the talks as a nonmember, Russian energy minister Alexander Novak refused to comment on whether he was confident about a deal.

Against this backdrop, West Texas Intermediate crude for January delivery CLF9, +1.20%  rose 29 cents, or 0.6%, to $51.79 a barrel on the New York Mercantile Exchange. The contract is headed for a roughly 1.5% weekly gain.

Global benchmark February Brent crude LCOG9, +2.31%  rose 75 cents, or 1.2%, to $60.77 a barrel on ICE Futures Europe. It is up some 2% for the week.

The cartel and its wider alliance is under pressure to support prices, which have fallen by more than 30% since reaching multiyear highs as recently as early October.

Growing concerns that oil producers won’t reach an agreement to aggressively reduce output has weighed on prices, but U.S. government data revealing the first decline in domestic crude supplies in 11 weeks did offer a brief respite in prices from the session’s lows on Thursday and contributed to Friday’s early move.

The decline in oil prices also comes as jitters pegged to international trade relations between China and the U.S. escalated, and raised concerns about demand for oil. Market tension intensified after the arrest of Huawei Technologies’s CFO Meng Wanzhou in Canada at the request of the U.S.

On Thursday, the Energy Information Administration said U.S. crude supplies fell by 7.3 million barrels for the week ended Nov. 30. That marked the EIA’s first reported weekly supply decline in 11 weeks.

Analysts surveyed by S&P Global Platts had forecast a decline of 2.39 million barrels, while the American Petroleum Institute on Tuesday reported a climb of 5.4 million barrels.

Gasoline stockpiles rose by 1.7 million barrels last week, while distillate stockpiles climbed by 3.8 million barrels, according to the EIA. The S&P Global Platts survey had shown expectations for supply increases of 357,000 barrels in gasoline and 1.25 million barrels in distillate inventories.

On Nymex, January gasoline RBF9, +1.61%  rose 1.3% to $1.45 a gallon and January heating HOF9, +1.11%  was at $1.8766 a gallon, up 1%.

January natural gas NGF19, +1.04%  rose 0.4% to $4.344 per million British thermal units. The EIA will release its weekly data on natural-gas supplies on Friday, a day later than usual because of Wednesday’s day of mourning.

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