Investing.com - Crude prices snapped two-straight days of losses on Tuesday, ignoring another weekly inventory rise forecast by analysts. Instead, traders focused on a report that OPEC might consider deeper supply cuts when it meets in December.
Talk has been on for weeks that at the December OPEC meeting, the cartel and its key ally Russia would debate cuts beyond the 1.2 million barrels per day they had agreed to in December 2018. It was a surprise Tuesday that the same speculation, with nary a confirmation from any of the stakeholders, could move both the West Texas intermediate and U.K. Brent crude benchmarks by more than 1% higher each on Tuesday.
“I can’t recall the number of times we’ve read that OPEC might deepen cuts when it meets in December,” said John Kilduff, founding partner at New York energy hedge fund Again Capital. “Yet, here’s the market going up again on that, when it should be neutral at least based on another crude build we most likely had last week.”
WTI settled up 97 cents, or 1.8%, at $57.11 per barrel.
Brent closed up 74 cents, or 1.3%, at $59.70.
Saudi Arabia and some Gulf oil producers in OPEC have been delivering more than their share of promised cuts and now want members such as Nigeria and Iraq, as well as top ally Russia, to contribute more, Reuters reported.
Russia, the world’s second-largest oil producer, said on Sunday it did not meet its supply reduction commitment in September because of an increase in natural gas condensate output as the country prepared for winter. There is no certainty that Moscow wants to do more in 2020 either.
The OPEC-cuts speculation papered over market expectations of inventory data for U.S. crude and fuels due between later Tuesday and Wednesday.
Analysts expect the U.S. government’s Energy Information Administration to report a crude build of 2.5 million barrels for last week, extending inventory rises for a sixth week.
Ahead of the EIA, however, the American Petroleum Institute will report its own supply-demand snapshot for last week at 4:30 PM ET. API’s numbers can contrast sharply with those of EIA.