Oil rebounds from 8-week low as OPEC pushes to secure deal

BloombergWednesday, November 16, 2016

LONDON • Oil rebounded from the lowest close in eight weeks as OPEC nations were said to be making a final diplomatic effort toward securing a deal to curb production and stabilise prices.

Futures rose as much as 2.6% in New York after falling 4.3% the previous three sessions. Qatar, Algeria and Venezuela are leading the push to finalise a deal, while Saudi Arabia, Iraq and Iran are at odds over how to share output cuts agreed at a September meeting in Algiers, according to a delegate familiar with the talks.

US crude stockpiles are forecast to gain for a third week, according to a Bloomberg survey before government data today.

Oil has retreated for almost four weeks amid scepticism about the ability of the OPEC to implement a deal at its Nov 30 meeting. The group is seeking to trim output for the first time in eight years as Iran boosts production and Iraq seeks an exemption because of war with Islamic militants.

Prices will probably remain around current levels if OPEC fails to cut, according to BP plc CEO Bob Dudley. “There is likely to be a deal for 32 million to 33 million barrels a day” when OPEC meets, said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “But no individual quotas, since they would not agree on numbers.”

West Texas Intermediate (WTI) crude for December delivery rose as much as US$1.11 to US$44.43 (RM191.05) a barrel on the New York Mercantile Exchange, and was at US$44.34 at 9:26am in London yesterday. The contract dropped nine cents to US$43.32 on Monday, the lowest close since Sept 19. Total volume traded was about 83% above the 100-day average. Prices slid 1.5% last week.

Brent for January settlement gained as much as 95 cents to US$45.38 a barrel on the London-based ICE Futures Europe exchange. The contract fell 32 cents to US$44.43 on Monday, the lowest close since Aug 10. The global benchmark traded at a 36-cent premium to WTI for January delivery. — Bloomberg 

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