Oil Rises on Strong US GDP Ahead of OPEC Meeting

Brent gained amid speculation OPEC will cut production when it meets later this week. West Texas Intermediate rose after the U.S. economy expanded more than previously forecast in the third quarter.

A coordinated output cut by the Organization of Petroleum Exporting Countries is inevitable, Deutsche Bank AG said in a report. The group is unlikely to make a reduction large enough to remove market oversupply, Citigroup Inc. said in a report. The 20 analysts surveyed last week by Bloomberg were divided, with half predicting a cut and the rest no action.

“Traders are split down the middle on whether OPEC is going to make a meaningful cut,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “Any kind of rally is probably going to be sold into. The U.S. economy is getting better.”

Brent for January settlement gained 51 cents, or 0.6 percent, to $80.19 a barrel at 9:25 a.m. New York time on the London-based ICE Futures Europe exchange. The volume of all futures was 11 percent below the 100-day average.

WTI for January delivery advanced 58 cents, or 0.8 percent, to $76.36 a barrel on the New York Mercantile Exchange. Volume was 53 percent below the 100-day average. Brent’s premium to WTI was at $3.87 on the ICE, compared with $3.90 yesterday.

OPEC, supplier of about 40 percent of the world’s oil, will meet Nov. 27 in Vienna to assess its collective output amid a supply glut and the drop in oil prices.

via Bloomberg

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