Crude Oil Prices Bounce Back But Upside Limited

Investing.com – Crude oil prices bounced higher on Friday, as investors digested news earlier in the week of another increase in U.S. stockpiles amid growing hopes that global oil producers will agree to prolong their output cut measures.

The U.S. West Texas Intermediate crude December contract was up 70 cents or about 1.27% at $55.84 a barrel by 09:50 a.m. ET (13:50 GMT).

Elsewhere, for January delivery on the ICE Futures Exchange in London was up 47 cents or about 0.77% at $61.85 a barrel, off a two-week low of $61.09 hit overnight.

Prices had come under pressure after the EIA reported on Wednesday that inventories rose by last week, marking the second-straight increase and compared with analysts’ expectations for a decline of 2.2 million barrels.

The report also showed that domestic production rose by 25,000 barrels per day (bpd) to a record 9.645 million. Output has now risen by almost 15% since the most recent low in mid-2016, casting doubts over the past few months’ narrative of tightening energy markets.

But oil prices recovered amid sustained optimism that oil producing countries will agree to extend an output cut at their meeting at the end of this month.

Under the original terms of the deal, OPEC and 10 other non-OPEC countries led by Russia agreed to cut production by 1.8 million barrels a day (bpd) for six months. The agreement was extended in May of this year for a period of nine more months until March 2018 in a bid to reduce global oil inventories and support oil prices.

Discussions are continuing in the run-up to the Nov. 30 meeting, which oil ministers from OPEC and the participating non-OPEC countries will attend.

Elsewhere, were up 0.17% at $1.721 a gallon, while gained 1.05% to $3.083 per million British thermal units.

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