Oil rises above $50
Oil rises above $50 despite doubts over OPEC output cut
LONDON Oil rebounded from the week’s lows to stabilize above $50 a barrel on Thursday as market watchers focused on a weekend meeting of OPEC and non-OPEC producers that may result in an agreement to cut crude output further.
Brent and U.S. oil prices gained support earlier from a slightly weaker dollar, but the U.S. currency turned positive as the euro fell on the European Central Bank’s decision to extend but reduce its bond-buying program.
Oil producers meet in Vienna on Saturday to see whether those outside the Organization of the Petroleum Exporting Countries will cut production to help erase a global supply glut that has depressed prices for more than two years.
OPEC has agreed to slash production by 1.2 million barrels per day (bpd) in the first half of 2017, a deal that bolstered crude futures despite doubts over whether the amount was enough and whether the cuts would be effectively implemented.
Brent was up 50 cents at $53.50 a barrel by 1400 GMT. U.S. light crude rose 50 cents to $50.27.
Both benchmarks have fallen more than $2 a barrel from highs reached on Monday when investors bought heavily in the wake of the OPEC deal.
Non-OPEC Russia has signaled it was ready to cut production by 300,000 bpd and on Thursday Azerbaijan said it would come to Vienna armed with proposals for its own reduction.
Nevertheless, some analysts suggest the promised reduction in crude oil production may be insufficient to dent global oversupply and rebalance markets.
“Optimism over the OPEC cut decision has eroded a bit,” said SEB Chief Commodities Analyst Bjarne Schieldrop in Oslo.
“The devil will be in the details.”
Stocks data on Wednesday provided little guidance on the state of the U.S. oil market.
U.S. crude oil inventories dropped 2.4 million barrels in the week to Dec. 2, compared with analyst expectations for a draw of 1 million barrels.
But stocks at the Cushing, Oklahoma delivery hub for U.S. crude futures increased by 3.8 million barrels, the most since 2009, according to the U.S. Energy Information Administration (EIA).
(Additional reporting by Christopher Johnson in London, Jane Chung in Seoul and Keith Wallis in Singapore; Editing by Dale Hudson)