Oil Hits One-year High At $53.73 as Russia Backs OPEC

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 cartel 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.

“Putin coming out to say Russia will be part of the initiative has added another layer of credence to the speculation there will be a coordinated cut,” said John Kilduff, partner at New York energy hedge fund Again Capital.

“At some point, the market will call them on it and say ‘show us the cuts.’ And at that point, the Saudis might be willing to underwrite the cuts on their own because they really want these high prices. To me, $55 Brent is without doubt the next target,” he said.

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.