Oil supply cut to be discussed next month among OPEC and partner producers in an attempt to support the oil market. Brent prices rose on Wednesday, recovering from the previous session’s slide.
Oil rallied toward $67 earlier in the session following reports that OPEC and partners are discussing an oil supply cut. The proposal is to cut output by up to 1.4 million barrels per day (bpd).
International benchmark Brent crude LCOc1 was up 74 cents a barrel to $66.21, having fallen as low as $65.02. U.S. crude CLc1 was up 58 cents at $56.27.
Since mid-October, the price of Brent has fallen by 17.5% on concern about excess supply and slowing demand. This marks one of the biggest declines since a price collapse in 2014.
Oil markets are being pressured from two sides: a surge in supply from OPEC, Russia and other producers. Further, increasing concerns about a global economic slowdown weigh on the market trend.
Official storage data is due on Wednesday from the EIA, with analysts expecting a 3-million-barrel rise in crude inventories.
Forex – Commodities – Oil supply cut to be discussed – Prices rose
The dollar held its earlier losses against a basket of currencies on Wednesday. Data showed U.S. consumer prices grew in line with analysts’ forecasts in October. At 1338 GMT, an index that tracks the greenback against its major traded rivals was down 0.26% at 97.051.
Sterling fell from the 7-month high versus the euro and eased below $1.30 in volatile trading. The British currency was boosted from news that Britain and the EU agreed on the text of a Brexit deal.
Although sterling softened from peaks hit in the previous session, investors were anticipating wild swings ahead for the British currency. Sterling/dollar implied overnight volatility jumped to 23%, its highest since a general election in June 2017.
The single currency struggled below $1.13 as Italy re-submitted its draft budget for next year to the European Commission. Concerns over the Italian budget also spread to debt markets with yields on Italian government bonds hitting three-week highs.
In commodities, base metals eased slightly as weak retail sales data from top consumer China took the shine off.
Sources: Reuters, CNN money, BBC
PLEASE NOTE The information above is not investment advice.