Oil prices climb amid expected OPEC cut, but markets remain wary

Oil hits lowest in a year even as OPEC considers output cutMore

Oil hits lowest in a year even as OPEC considers output cutMore

Fisher went on to say that the worst of the market rout was due to momentum trading and hedge funds dumping crude futures in order to buy natural gas, which has surged over the last month: "When that trade is finally unwound and when. you start seeing. some more negative stats with no negative price action that's. when you'd want to buy the dip in crude".

As of 10:26 a.m. EST Brent crude front-month prices fell 1.2 percent to $65.95 per barrel, while WTI front-month was 1.1 percent lower to $56.06 per barrel, partly recovering from deeper declines earlier in the session.

Alexander Novak, Russian Energy Minister, stated that Russia, which is not an OPEC member, meant to sign a partnership agreement with the group.

Crude markers in NY and London have both fallen more than 20 percent from their October highs on concerns over a supply glut after the USA granted waivers to some countries to buy Iranian oil despite sanctions. U.S. West Texas Intermediate (WTI) plunged more than 6 percent to $53.63, its lowest level going back to October 2017.

"The market's bullish radar is still waiting for OPEC+ to deliver a sizeable cut number", said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

Despite that, markets remained wary amid deep trade disputes between the world's two biggest economies, the United States and China, after the pair could not find a solution to their spat at the Asia-Pacific Economic Cooperation (APEC) at the weekend.

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As trader await API inventory data tonight, expected to show a ninth weekly increase - the longest streak in a year - concerns grow that Russian Federation may not play nice with OPEC and cut production when they meet next month. The contract lost $3.73 last week.

US crude oil production has soared by nearly 25 percent this year, to a record 11.7 million barrels per day (bpd). Total volume traded Tuesday was 40 percent above the 100-day average.

The group and its allies are considering cutting production by more than 1 million barrels a day as they're increasingly anxious about the potential for oversupply, people familiar with the matter said.

OPEC ministers are scheduled to meet in Vienna on December 6, with their allies from outside the group joining them the next day.

Meanwhile, drillers in the U.S. added two more working rigs last week, bringing the total to 888, the highest level since March 2015, according to Baker Hughes data. Meanwhile, the world's top producers - the United States, Russia and Saudi Arabia - have been pumping at or near records.

Despite today's sharp downward trend, some analysts think that prices are set to regain ground over the next month, based on the trends from past such oil price slumps.

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