U.S. Oil Prices Rise from 2018 Lows

Catogory : Market Report

Oil prices rebounded slightly Wednesday from Tuesday’s drop as investors weigh concerns that global output could outstrip demand against potential supply cuts from the Organization of the Petroleum Exporting Countries and its allies.

Light, sweet crude for December delivery ended 1% higher at $56.25 a barrel on the New York Mercantile Exchange. sweet crude ended up 1% at $66.12 a barrel. Wednesday’s price increase in the U.S. crude-oil benchmark, known as West Texas Intermediate, ended a 12-session losing streak for WTI that was the longest of all time going back to 1983 when crude oil futures first began trading in New York.

WTI had its steepest plummet in over three years on Tuesday, ending 7.1% down at its lowest closing price this year, $55.69 a barrel, while Brent closed down 6.6%. Both benchmarks have slid roughly 25% since reaching four-year highs at the start of October, leaving them well into a bear market, which is roughly defined as a 20% decline from a recent peak. OPEC and its allies outside the cartel, led by Russia, signaled Sunday they could decide in December to hold back output by around 1 million barrels a day, amid signs the market will be oversupplied in 2019.That prospect bolstered prices at the start of the week, before President Trump sent out a tweet criticizing any cut by the Saudis and OPEC, triggering a renewed selloff. That forecast contrasted with OPEC’s monthly oil market report, released Tuesday, which predicted a slowdown in global demand growth by 40,000 barrels a day this year and 70,000 barrels a day next year. OPEC and its allies are set to gather in Vienna starting Dec. 6, where they may decide to cut production to reduce global supplies and boost prices.