Oil traders continue to eye OPEC meeting

Henning Gloystein @hgloystein   ( Reuters Singapore )

SINGAPORE, Nov 22 (Reuters) – Oil prices firmed on Wednesday after a reported fall in U.S. crude inventories and on expectations that an OPEC-led production cut aimed at tightening the market will be extended beyond March 2018.

Brent crude futures, the international benchmark for oil prices, were at $62.81 per barrel at 0112 GMT, up 24 cents, or 0.4 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $57.31 a barrel, up 48 cents, or 0.8 percent.

Traders said markets were generally well supported by an effort led by the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC producers led by Russia to restrain output in a bid to end a global supply overhang.

The deal to curb output is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss the outlook for the policy.

“All eyes remain focused on the OPEC’s flux and reflux heading to Vienna as the meeting’s outcome will ultimately determine oil prices’ near-term fate,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA.

J.P. Morgan said in its 2018 commodities outlook, released late on Tuesday, that “oil markets in 2018 will be balanced on the back of extended OPEC-NOPEC production cuts,” but added that without extended cuts “markets will be in surplus.”

The U.S. bank said “we expect Brent to trade at the top of the $40 to $60 per barrel range, with Brent averaging $58 per barrel in 2018. WTI is expected to average $54.6 per barrel.”

Traders said there was also some price support from a weekly report on Tuesday by the American Petroleum Institute which said U.S. crude inventories fell by 6.4 million barrels in the week to Nov. 17.

Despite this, traders said crude markets were somewhat capped by rising production in the United States, which has jumped by almost 15 percent since mid-2016 to 9.65 million barrels per day. C-OUT-T-EIA

Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

Latest posts by Stephen Innes (see all)