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Oil futures rebound as markets weigh OPEC supply cut prospects

Published 10/27/2016, 04:19 AM
© Reuters.  Oil bounces off 3-week lows in European trade

Investing.com - Oil prices were higher during European hours on Thursday, bouncing off the prior session's three-week low as market players awaited details of a planned output cut by the Organization of the Petroleum Exporting Countries.

Crude oil for December delivery on the New York Mercantile Exchange inched up 22 cents, or 0.45%, to $49.40 a barrel by 4:18AM ET (08:18GMT).

On Wednesday, New York-traded oil closed down 78 cents, or 1.56%, at $49.18, after falling to $48.87, a level not seen since October 4.

U.S. crude oil inventories unexpectedly fell by 553,000 barrels last week to 468.2 million barrels, the Energy Information Administration said Wednesday. However, the decline was centered on the West Coast, which is isolated from the rest of the network.

Elsewhere, Brent oil for December delivery on the ICE Futures Exchange in London tacked on 36 cents, or 0.72%, to $50.34 a barrel.

The contract slumped to $49.65 on Wednesday, the lowest since October 3, amid fading expectations of a coordinated production cut among major global oil producers.

Oil futures have been under pressure in recent days amid market skepticism over the implementation of a planned deal by OPEC to limit production.

The 14-member oil group reached an agreement to cap output to a range of 32.5 million to 33.0 million barrels per day in talks held on the sidelines of an energy conference in Algeria late last month.

However, OPEC said it won’t finalize details on individual output quotas until its next official meeting in Vienna on November 30.

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In September, the group’s production reached 33.4 million barrels a day.

The possibility that producers could walk away empty-handed from the upcoming meeting looms large after Iraq, Iran, Nigeria and Libya all signaled they might not take part in the proposed production cut deal. Russia’s unclear stance is also fueling uncertainty.

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