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Oil edges higher ahead of OPEC outcome, U.S. stockpile data

Published 09/28/2016, 04:33 AM
Updated 09/28/2016, 04:33 AM
© Reuters.  Oil edges higher ahead of OPEC outcome, U.S. stockpile data

Investing.com - Oil prices edged higher during European hours on Wednesday, after plunging nearly 3% a day earlier, as investors wait to see if any kind of oil output deal can be salvaged from a meeting of major oil producers in Algeria.

OPEC members, led by Saudi Arabia and other big Middle East crude exporters, such as Iran and Iraq, will meet non-OPEC producer Russia on the sidelines of the International Energy Forum in Algeria at 14:00GMT (10:00AM ET) Wednesday.

There were hopes that major global oil producers could agree to a possible last-minute output freeze deal that would support the market.

However, according to market experts, chances that the meeting would yield any action to reduce the global glut appeared minimal. Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.

An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.

On the ICE Futures Exchange in London, Brent oil for December delivery tacked on 24 cents, or 0.52%, to $46.76 a barrel by 4:30AM ET (08:30GMT).

On Tuesday, London-traded Brent futures sank $1.41, or 2.94%, after both Saudi Arabia and Iran played down expectations for a deal to freeze or cut oil production at the closely watched informal OPEC meeting.

Elsewhere, crude oil for November delivery on the New York Mercantile Exchange inched up 22 cents, or 0.49%, to $44.89 a barrel, after tumbling $1.26, or 2.74%, a day earlier.

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Market players awaited fresh weekly information on U.S. stockpiles of crude and refined products.

The U.S. Energy Information Administration will release its weekly report on oil supplies at 10:30AM ET (14:30GMT) amid analyst expectations for an increase of 3.0 million barrels.

Gasoline inventories are expected to rise by 178,000 barrels while stocks of distillates, which include heating oil and diesel, are forecast to drop by 14,000 barrels.

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories surprisingly fell by 752,000 barrels in the week ended September 23. The API report also showed a decline of 3.7 million barrels in gasoline stocks, while distillates showed a drop of 343,000 barrels on the week.

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