By 9:30 a.m. Kyiv time, Brent crude oil futures for December delivery rose to $51.35 per barrel, gaining 0.94%. At the same time, November WTI contracts increased by 1.05%, reaching $49.20 per barrel. At the close of the previous trading session, these benchmark grades finished at $50.87 and $48.69, respectively.
Market participants attribute the current rise in quotes mainly to data from the American Petroleum Institute (API), which showed a decrease in commercial crude inventories in the U.S. by 7.6 million barrels. This is already the fifth consecutive week that such a decline has been recorded. Notably, experts polled by Reuters had expected the opposite trend and forecast an increase in inventories by 2.7 million barrels.
According to Gary Ross, founder and head of the New York-based consulting firm PIRA, a likely OPEC deal to limit production will most likely have only a moderate impact on prices, providing a slight increase.
Jason Gammel of investment bank Jefferies, in turn, expressed doubt about the successful implementation of OPEC agreements due to internal contradictions within the cartel. Nevertheless, as the analyst noted, the very prospect of a possible production cut has already laid the foundation for higher quotes, and this factor will support the market at least until the next meeting of the organization, scheduled for November 30.
In addition to the issue of concluding a deal on production, Gammel considers the situation in Libya and Nigeria to be the main source of uncertainty for the market. Both countries are seeking to increase oil production and export volumes. If at least one of them succeeds, other OPEC members will have to make significantly deeper cuts, the expert emphasizes.
Specialists at ING bank also urge not to harbor excessive illusions regarding OPEC agreements until all key details of the deal are settled.
