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US oil prices reach highest level for 2016

US oil prices finished at their highest level of 2016 at the end of trading on Monday. (Photo by Reuters)

US oil prices finished at their highest level of 2016 Monday after President Vladimir Putin said Russia was ready to support OPEC's push to limit oil output.

US benchmark West Texas Intermediate for November delivery jumped $1.54 to $51.35 a barrel on the New York Mercantile Exchange, the highest closing price since July 2015, AFP reported.

Also, Brent Crude oil in late afternoon was trading up by 2.5% at $53.21 a barrel, just off the $53.73 high hit earlier on Monday.

Russian President Vladimir Putin told the World Energy Congress in Istanbul that his country is ready to reduce oil production as discussed in a recent meeting of OPEC and non-OPEC states in Algeria.

Putin criticized the surplus of oil and warned that if current tendencies continue, it will lead to lack of financing, deficits and new price fluctuations – what he said will hit both producers and consumers. 

Oil producing countries want to reduce the global glut of an estimated 1.0 million to 1.5 million barrels per day (bpd).

On September 28, OPEC agreed to curb production by 700,000 bpd.

Iran, however, was excluded from the plan because of its exceptional situation of having been under sanctions for a number of years.

Since the removal of nuclear-related sanctions targeting its oil industry earlier this year, Iran — which is OPEC’s third largest producer after Saudi Arabia and Iraq — had been boosting production in order to reach previous levels and had been rejecting calls on the country to freeze production as unfair.

The OPEC is yet to decide how much each country will produce in its next meeting in Vienna in November.

Other non-OPEC producers including Russia will also be invited to join the deal.

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