Oil rose 1% on Wednesday, returning some of the heavy fall of the previous meeting, against the backdrop of growing chances that the Organization of Petroleum Exporting Countries and Allied producers will cut output at next month's meeting prices.
Photo File: JX Nippon Oil & Energy Refinery Corp. is pictured in Yokohama, Japan February 7, 2017. Reuters / Kim Kyung-Hoon
After a record of 12 consecutive days of losses and the sharpest loss in one day for more than three years, the oil market reversed after Reuters reported that OPEC and its partners were discussing a proposal to cut output to 1.4 million barrels per day (bpd) .
Brent crude rose 65 cents, or 1 percent, to $ 66.12 a barrel, after hitting a record $ 67.63.
US crude oil futures rose 56 cents, or 1.01%, to $ 56.25 per barrel after sliding to 12 straight sessions to their lowest level since November 2017.
Oil inventories rose 8.8 million barrels a week to $ 440.7 million on November 9, compared with analysts' forecasts of 3.2 million barrels. [API/S]
Oil markets are being pushed by rising supply from OPEC, Russia, the United States and other producers, and worry that a global economic slowdown could cut demand for energy.
This pushed the price of Brent global Brent down more than 20 percent since early October, one of the biggest declines since the price collapse in 2014.
"The market has cratered in recent weeks and the pop today is associated with chatter that producers can cut up to $ 1.4 million in 2019," said Jin McGillian, vice president of market research for traditional energy in Stamford, Connecticut.
"Perhaps some of the concerns about further supply and reduction in demand have finally been delivered to the market, but I would not say that the bottom has already arrived."
As oil crashed from its October peak, natural gas future NGc1 soared to 56% during this period up to 4-1 / 2 year high. Recent sales of oil have intensified, as traders stripped long oil trades short of oil, market participants said.
The Relative Strength Index (RSI) both Brent and US crude remained below 30, a technical level often considered to signal a market that has fallen too far.
Financial firms that hedge the risk involved in selling call options to oil producers have created further downward pressure as prices fall ahead of stock strikes, Goldman Sachs said.
"This market is trying to find a low price after 12 consecutive days of decline," said Git Ritterbusch, president of Ritterbusch Co., said a note.
"Although the supply is still relatively modest, the market is focusing on the dynamics of expansion in a shed that will have to show signs of reversal before setting a bottom price."
In its monthly report, the International Energy Agency of Paris (IEA), based in Paris, said that the stock stock embodied in the first half of 2019 is $ 2 million.
The IEA left the forecast for global demand growth for 2018 and 2019 unchanged from last month, but reduced its forecasts for growth in non-OECD demand, the engine of expansion in global consumption.
US oil output from its seven major coal basins is expected to reach a record $ 7.94 million in December, the US Energy Administration (EIA) reported today.
The increase in land output helped the overall production of crude oil in the US, C-OUT-T-EIA reached a record of 11.6 million dollars, making the US the largest oil producer in the world before Russia and Saudi Arabia.
Most analysts expect US output to rise above $ 12 million in the first half of 2019.
The increase in production in the US is contributing to a higher inventory, with US government storage figures expected to arrive on Thursday. [EIA/S]
Another report by Alex Lawler, Ahmad Fader, Amanda Cooper and Henning Glojastin; Edited by David Gregorio and Tom Brown