Crude oil prices rebound after one of their worst sessions of the year as Russia comes forward with support for a proposed production ceiling arrangement. File photo by Monika Graff/UPI |
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WASHINGTON, Nov. 1 (UPI) -- Crude oil prices rebounded Tuesday after a rough session marked by doubts about an OPEC maneuver, though there are indications of a return to balance.
Crude oil suffered dramatic losses during the previous session after weekend meetings between members of the Organization of Petroleum Exporting Countries concluded without any formal agreements on how to implement a production ceiling proposed in Algeria in September. Oil prices in one day gave up most of what they'd gained in October.
Markets will have formal numbers to work with later this week after the U.S. Energy Information Administration releases data about crude oil storage levels and production. Data released Monday show U.S. crude oil production increased in August. That's the first time for a gain since May and suggests U.S. shale may be more resilient to lower crude oil prices than initially estimated.
A preview of EIA data from S&P Global Platts estimates a build in stockpiles that would be 20 million more than this time last year if accurate, though crude oil inventories are around 9 percent below their peak levels in April.
The price for Brent crude oil, now in the January contract, rose 0.9 percent to open in New York at $49.06 per barrel. West Texas Intermediate, the U.S. benchmark for crude oil prices still trading in the December contract, was up 0.6 percent to start the trading day at $47.14 per barrel.
Prices may be in part reacting to trends in the U.S. presidential election as the latest revelation from the FBI eats into the lead for former Secretary of State Hillary Clinton. Republican nominee Donald Trump is seen as more favorable to oil companies than his rival.
Data published later this week that could influence crude oil prices may also be skewed by an explosion at a gasoline pipeline in Alabama. With two lines down for more than a week, U.S. inventory levels could build up higher than normal supply and demand factors would move them.
Verbal stimulus may also be playing a role in Tuesday's rally as Russia, whose position on the OPEC ceiling has been fluid, offered support for some level of coordination between OPEC and non-OPEC countries.
"We can state that positions of most of the countries mainly coincide," Dmitry Peskov, a spokesperson for Russian President Vladimir Putin, was quoted by Russian news agency Tass as saying. "We hope for a consensus in this area."
