AGL 40.00 Decreased By ▼ -0.16 (-0.4%)
AIRLINK 129.53 Decreased By ▼ -2.20 (-1.67%)
BOP 6.68 Decreased By ▼ -0.01 (-0.15%)
CNERGY 4.63 Increased By ▲ 0.16 (3.58%)
DCL 8.94 Increased By ▲ 0.12 (1.36%)
DFML 41.69 Increased By ▲ 1.08 (2.66%)
DGKC 83.77 Decreased By ▼ -0.31 (-0.37%)
FCCL 32.77 Increased By ▲ 0.43 (1.33%)
FFBL 75.47 Increased By ▲ 6.86 (10%)
FFL 11.47 Increased By ▲ 0.12 (1.06%)
HUBC 110.55 Decreased By ▼ -1.21 (-1.08%)
HUMNL 14.56 Increased By ▲ 0.25 (1.75%)
KEL 5.39 Increased By ▲ 0.17 (3.26%)
KOSM 8.40 Decreased By ▼ -0.58 (-6.46%)
MLCF 39.79 Increased By ▲ 0.36 (0.91%)
NBP 60.29 No Change ▼ 0.00 (0%)
OGDC 199.66 Increased By ▲ 4.72 (2.42%)
PAEL 26.65 Decreased By ▼ -0.04 (-0.15%)
PIBTL 7.66 Increased By ▲ 0.18 (2.41%)
PPL 157.92 Increased By ▲ 2.15 (1.38%)
PRL 26.73 Increased By ▲ 0.05 (0.19%)
PTC 18.46 Increased By ▲ 0.16 (0.87%)
SEARL 82.44 Decreased By ▼ -0.58 (-0.7%)
TELE 8.31 Increased By ▲ 0.08 (0.97%)
TOMCL 34.51 Decreased By ▼ -0.04 (-0.12%)
TPLP 9.06 Increased By ▲ 0.25 (2.84%)
TREET 17.47 Increased By ▲ 0.77 (4.61%)
TRG 61.32 Decreased By ▼ -1.13 (-1.81%)
UNITY 27.43 Decreased By ▼ -0.01 (-0.04%)
WTL 1.38 Increased By ▲ 0.10 (7.81%)
BR100 10,407 Increased By 220 (2.16%)
BR30 31,713 Increased By 377.1 (1.2%)
KSE100 97,328 Increased By 1781.9 (1.86%)
KSE30 30,192 Increased By 614.4 (2.08%)
Markets

Oil rises 1% on hopes OPEC will extend supply cuts, weaker US dollar

IMF says US-China trade war will cut 2019 global growth EU sources say Brexit talks hit standstill Coming
Published October 16, 2019
  • IMF says US-China trade war will cut 2019 global growth
  • EU sources say Brexit talks hit standstill
  • Coming Up: API US crude stocks data, 4:30 pm ET/2030 GMT

HOUSTON: Oil rose about 1.4% on Wednesday, gaining support due to signs that OPEC and allied producers will continue to curb supplies in December, a weaker US dollar and as traders covered short positions ahead of an industry report on US crude inventories.

Brent crude, the global benchmark, rose 68 cents, or 1.16%, to settle at $59.42 a barrel. US crude gained 55 cents, or 1.04%, to settle at $53.36.

The Organization of the Petroleum Exporting Countries and its allies meet on Dec. 5-6 in Vienna to review output policy.

Market participants believe the group known as OPEC+ could decide to extend production cuts "and wait until world demand catches up with the supply situation," said Andy Lipow, president of Lipow Oil Associates in Houston.

OPEC Secretary-General Mohammad Barkindo has said deeper output cuts are an option. On Tuesday, he said OPEC would do what it could with allied producers to sustain oil market stability beyond 2020.

OPEC, Russia and other producers have agreed to cut oil output by 1.2 million barrels per day until March 2020.

"You did see the OPEC secretary general say OPEC could act to keep the market stable, and if we come back under pressure again we might see that again," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.

In early trading, prices had slipped because of concerns about weaker demand for fuel due to slower economic growth and forecasts of a further rise in US crude inventories.

The dollar weakened after US retail sales data disappointed investors. Oil is traded in US dollars, so oil typically rises when the dollar falls.

"The dollar is getting whacked right now. It is pushing into territory we haven't seen since a month ago," said Joshua Graves, senior market strategist at RJO Futures. "If that continues to sell off, that will continue to boost oil prices."

On Tuesday, the International Monetary Fund fed worries about crude demand when it said the US-China trade war would cut 2019 global growth to its slowest since the 2008-2009 financial crisis.

The American Petroleum Institute (API) reports weekly US inventory numbers at 4:30 p.m. EDT (2030 GMT), ahead of government stocks data. Analysts estimate US crude inventories rose around 2.8 million barrels last week.

"The market oversold yesterday on talk of a big build in inventory," said Phil Flynn, senior energy analyst at Price Futures Group in Chicago. "We're seeing some short covering ahead of the (API) report tonight."

Optimism about an imminent Brexit deal had supported prices, although this faded after EU sources said talks hit a standstill. Analysts have said any agreement that avoids a no-deal Brexit should boost economic growth and oil demand.

Comments

Comments are closed.