Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil Rises on Debate of Deeper OPEC Cuts as Another Crude Build Looms

Published 10/22/2019, 01:30 PM
Updated 10/22/2019, 03:19 PM
© Reuters.

© Reuters.

Investing.com - Crude prices snapped two-straight days of losses on Tuesday, ignoring another weekly inventory rise forecast by analysts. Instead, traders focused on a report that OPEC might consider deeper supply cuts when it meets in December.

Talk has been on for weeks that at the December OPEC meeting, the cartel and its key ally Russia would debate cuts beyond the 1.2 million barrels per day they had agreed to in December 2018. It was a surprise Tuesday that the same speculation, with nary a confirmation from any of the stakeholders, could move both the West Texas intermediate and U.K. Brent crude benchmarks by more than 1% higher each on Tuesday.

“I can’t recall the number of times we’ve read that OPEC might deepen cuts when it meets in December,” said John Kilduff, founding partner at New York energy hedge fund Again Capital. “Yet, here’s the market going up again on that, when it should be neutral at least based on another crude build we most likely had last week.”

WTI settled up 97 cents, or 1.8%, at $57.11 per barrel.

Brent closed up 74 cents, or 1.3%, at $59.70.

Saudi Arabia and some Gulf oil producers in OPEC have been delivering more than their share of promised cuts and now want members such as Nigeria and Iraq, as well as top ally Russia, to contribute more, Reuters reported.

Russia, the world’s second-largest oil producer, said on Sunday it did not meet its supply reduction commitment in September because of an increase in natural gas condensate output as the country prepared for winter. There is no certainty that Moscow wants to do more in 2020 either.

The OPEC-cuts speculation papered over market expectations of inventory data for U.S. crude and fuels due between later Tuesday and Wednesday.

Analysts expect the U.S. government’s Energy Information Administration to report a crude build of 2.5 million barrels for last week, extending inventory rises for a sixth week.

Ahead of the EIA, however, the American Petroleum Institute will report its own supply-demand snapshot for last week at 4:30 PM ET. API’s numbers can contrast sharply with those of EIA.

Latest comments

What will be the refinery utilization numbers, down almost 20 percent again? Let's get the whole story this time..
And it's going to be a huge build and it will be a quick build. Oh...thats the trade deal.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.