Oil prices rose on Wednesday after Iraq´s oil minister said Organization of the Petroleum Exporting Countries (OPEC) and other crude producers were considering extending or even deepening a supply cut to curb a global glut, while a report showed a smaller-than-expected increase in USA inventories.
At $55.50 a barrel, Benchmark Brent crude was up 3 cents at 2:03 p.m. ET (1803 GMT), in an unstable session that made it stretch from a high of $55.75 a barrel to an intraday low of $54.86.More news: Sindhu downs Okuhara to clinch Korea Open
OPEC and other producers, including Russian Federation, have agreed to reduce output by about 1.8 million barrels per day until next March in a bid to reduce global oil inventories and support oil prices.
Market participants initially shrugged off Wednesday's report by the U.S. Energy Information Administration showing that crude stockpiles rose more than expected last week. Near 2:00pm EST, prices had climbed even further, with WTI up 2.16% at $50.55, and Brent up 2.14% at 56.32, as investors enjoyed a lower-than anticipated build in crude oil inventories.
OPEC and other producers are considering a range of options, including an extension of cuts, but it is premature to decide on what to do beyond the agreement's expiry date in March, Iraqi oil minister, Jabar al-Luaibi, told an energy conference last Tuesday.More news: How To Watch 69th Emmy Awards Online TV Start Time
Economists at the Organization of Petroleum Exporting Countries said in their monthly market report for September that total commercial oil stocks for members of the Organization for Economic Cooperation and Development were 195 million barrels above the five-year average and 123 million barrels above the seasonal norm. The EIA's next weekly dataset is on Wednesday. "The question now is whether the $50-per-barrel WTI price is attractive enough for shale producers to sell their production forward. Only a few years ago, there was always US$10 a barrel premium on the price for geopolitical uncertainty, but that is completely gone, but stocks are still very high and any disruption to the market could be easily covered", he added.
Ministers "may try to lay out some preliminary numbers, but I don't think you'll see anything concrete come out", Paul Crovo, a Philadelphia-based oil and equity analyst at PNC Capital Advisors LLC, said by telephone. "The report shows that we're recovering from the hurricane", Rob Haworth, who helps oversee $142 billion at U.S. Bank Wealth Management in Seattle, said by telephone.More news: Julia Louis-Dreyfus Sets Her Place in TV History, Again