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Crude Oil up 2,2% in USA

US crude settles up 2.2% at $50.84, rallying after dip on OPEC deal doubt


Jonathan Alcorn | Reuters
Oil jack pumps are pictured in the Kern River oil field in Bakersfield, Calif.

Oil rebounded from the week’s lows to close above $50 a barrel on Thursday as market watchers focused on an upcoming weekend meeting between OPEC and non-OPEC producers that may result in an agreement to cut crude output further.

Brent and U.S. oil prices gained support early 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.

North Sea Brent crude was up 94 cents, or 1.8 percent, at $53.94 a barrel by 2:35 p.m. ET (1935 GMT). U.S. light crude was up $1.07, or 2.2 percent, at $50.84 a barrel.

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.

The one guy who correctly predicted the fall of oil prices tells Cramer the price of oil in 2021

The one guy who correctly predicted the fall of oil prices tells Cramer the price of oil in 2021   

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.

Late in the morning, Brent flipped into negative territory while U.S. prices pared gains briefly after reports that Russia sees a risk that the meeting could be moved due to questions that have come up. A Russian energy ministry spokeswoman, however, said the meeting would continue as planned.

Speaking at a conference in New York, former OPEC Secretary General Abdalla El-Badri said that a non-OPEC production cut of about 600,000 barrels per day (bpd) was “a must.”

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.

Given the rally to $50 a barrel, non-OPEC members may not be persuaded to cut output, said Tim Evans, energy futures specialist at Citigroup.

“Further effective cooperation between oil producers seems unlikely in our view, as OPEC and Russia have already agreed on policy, reducing the leverage they have with other countries in our view,” he said in a note.

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.

Energy and banking sectors remain in focus: Expert

Energy and banking sectors remain in focus: Expert   

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).

Crude Oil Down Again

US crude settles down 3.9% at $45.23 on doubts over OPEC output cuts



OPEC technical teams fail to reach output deal -Report

OPEC technical teams fail to reach output deal -Report   

Oil prices fell as much as 4 percent on Tuesday on signs leading oil exporters in OPEC were struggling to agree on a deal to cut production to reduce global oversupply.

Brent crude oil was down $1.87, or 3.9 percent, a barrel at $46.37 by 2:38 p.m. ET. U.S. light crude oil settled down $1.85, or 3.9 percent, at $45.23 a barrel.

The Organization of the Petroleum Exporting Countries will meet in Vienna on Wednesday aiming to implement a deal outlined in September to cut output by around 1 million barrels per day (bpd), from around 33.82 million bpd in October.

But Iran and Iraq were resisting pressure from Saudi Arabia to curtail oil production, making it hard for OPEC to reach an agreement. That has led some analysts to suggest the meeting may fail to reach a deal or produce one that is unworkable.

OPEC deal or no deal could go up until last minute

OPEC deal negotiations could go up until the last minute: Analyst   

“The inability to arrive at a framework for a reasonable agreement after 2½ months of Saudi driven discussions strongly suggests any formal communique to restrain output will be a watered down version,” Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.

Ritterbusch, however, said he believes OPEC had a better than 50 percent chance of reaching an agreement, which should offer some near-term price relief. He noted the burden of actual curtailments would likely fall on the Persian Gulf producers, especially the Saudis.

Documents prepared for a ministerial OPEC meeting on Wednesday propose the group cut production by 1.2 million bpd from October levels, an OPEC source familiar with the papers said.

The papers for the meeting also propose Saudi Arabia reduce production to 10.07 million bpd from 10.54 million bpd in October and that Iran freeze output at 3.797 million bpd, according to the source.

Iran’s oil minister earlier on Tuesday said the country was prepared to leave its oil production at levels to which OPEC had agreed at its September meeting in Algeria.

OPEC, which accounts for a third of global oil production, agreed in September to cap output at around 32.5-33.0 million barrels per day versus the current 33.64 million bpd to prop up oil prices, which have halved since mid-2014.

OPEC said it would exempt Iran, Libya and Nigeria from cuts as their output has been crimped by unrest and sanctions.

Non-OPEC producer Russia confirmed on Tuesday it would not attend the OPEC gathering, but added that a later meeting was possible.

Don't typifiy OPEC meeting as Iran vs. Riadh

Don’t typifiy OPEC meeting as Iran vs. Saudi Arabia: Reporter   

Indonesian Energy Minister Ignasius Jonan said he was not sure OPEC would clinch a deal to limit oil output when it met.

“I don’t know. Let’s see. The feeling today is mixed,” he told reporters when asked about the prospects of a deal.

Intense negotiations would be needed on Wednesday to cement a deal, Goldman Sachs analysts said. If OPEC agreed to cut production to 32.5 million bpd, crude prices would likely rise to the low $50s a barrel, Goldman said.

“If no deal is reached, our expectation of rising (crude) inventories through the first half of 2017 would warrant prices averaging $45 per barrel through next summer,” Goldman said.

In Asia, OPEC’s biggest customer region, oil importers made clear that they would not be happy with an artificial supply cut that hikes prices, and that in case of a cut they would seek more supplies from outside OPEC.

In the United States, analysts polled by Reuters ahead of weekly inventory reports from the American Petroleum Institute (API) industry group later on Tuesday and the U.S. Energy Information Administration (EIA) on Wednesday estimated, on average, that crude stocks increased about 900,000 barrels in the week to Nov. 25..