Oil Rises Before Inventory Figures as OPEC Cuts Output

West Texas Intermediate crude rebounded from a 17-month low before government inventory data that will signal the strength of fuel demand. Brent rose from the lowest level in more than two years in London.

Futures climbed as much as 1 percent in New York after tumbling 3.6 percent yesterday. Crude stockpiles probably expanded by 1.5 million barrels last week, while gasoline supplies shrank, a Bloomberg survey showed before an Energy Information Administration report today. Prices will probably rebound this quarter as Saudi Arabia cuts output and global demand increases, according to UBS AG and Barclays Plc.

“The market is stabilizing after the huge drop yesterday,” Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut, said by phone. “In one day the gains of the previous two weeks evaporated. It’s important that it held near the one-and-a-half year low.”

WTI for November delivery advanced 83 cents, or 0.9 percent, to $91.99 a barrel at 9:07 a.m. on the New York Mercantile Exchange. Futures slid $3.41 to $91.16 yesterday, the biggest one-day decline November 2012. Prices lost 13 percent in the third quarter and are down 6.5 percent this year.

Brent for November settlement gained 57 cents, or 0.6 percent, to $95.24 a barrel on the London-based ICE Futures Europe exchange. Yesterday’s close of $94.67 was the lowest since June 28, 2012. The European benchmark traded at a $3.23 premium to WTI.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza