Oil advanced as Iraq said it pledged to cooperate with OPEC to reach an agreement this week that’s acceptable to all members.

Futures rose as much as 2.7 percent in New York after earlier declining. Iraq’s Oil Minister Jabbar al-Luaibi said Monday he’s “optimistic” a deal will be reached at OPEC’s summit in Vienna on Wednesday.

 Saudi Arabia previously said that the producer group doesn’t necessarily need to curb oil output, after pulling out of a scheduled meeting with non-members including Russia.

“The market is going to be like a yo-yo reacting to headlines surrounding the Nov. 30 Vienna meeting,” Bart Melek, the head of global commodity strategy at TD Securities in Toronto, said by telephone. Statements out of Iraq lead to the assumption that it is likely a deal to cut output will be reached, he says.

The Organization of Petroleum Exporting Countries is heading into the last stretch of negotiations before its November 30 meeting to adopt a supply deal that was first floated in September. Oil prices whipsawed last week as various OPEC members and Russia tried to position themselves ahead of a final accord to reduce production. Ministers from Algeria and Venezuela headed to Moscow on Monday to get the biggest non-OPEC producer on board.

West Texas Intermediate for January delivery rose $1.02 to $47.08 a barrel at 10:08 a.m. on the New York Mercantile Exchange. Total volume traded Monday was 31 percent higher than the 100-day average.

Brent for January settlement advanced $1.01, or 2.1 percent, to $48.25 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a $1.17 premium to WTI.

Saudi Stance

While Saudi Arabia has pushed to reverse OPEC’s pump-at-will policy, Energy Minister Khalid Al-Falih said Sunday the oil market would recover in 2017 even without cuts as consumption grows in countries such as the U.S., according to Saudi newspaper Asharq al-Awsat.

Russia has so far resisted requests to join a cut, offering instead to freeze production at current levels. Energy Minister Alexander Novak has insisted that OPEC reach an internal consensus on output curbs before Russia considers joining an accord. Algerian Energy Minister Noureddine Boutarfa presented a proposal Saturday to Iranian Oil Minister Bijan Namdar Zanganeh for an OPEC cut of 1.1 million barrels a day, according to an Iranian oil ministry official.

“The past weeks’ back and forth of diplomacy reveals how small the common denominator is,” Norbert Ruecker, head of commodity research at Julius Baer Group Ltd. in Zurich, said by e-mail. “Chances for a deal are high but we remain skeptical that it has teeth and see no lasting impact on prices.”

Oil-market news:

Iran’s Persian Gulf Petrochemical Industries Co. is in talks with Asian companies to raise as much as 1 billion euros ($1.1 billion) for an expansion including a methanol project intended to serve China and other Asian customers.

Shale drillers have added 158 rigs since May, according to Baker Hughes Inc. At the same time, companies such as Chesapeake Energy Corp. and EOG Resources Inc. have boosted efficiency by cramming more sand into wells, aiming to extend their reach miles further.

Copyright: Bloomberg