Oil Rises After Report OPEC, Allies to Discuss Deepening Cuts

Oil was little changed in Asian trading on Tuesday after falling for two days

Jacquelyn Melinek

23 Oct 2019, 03:55 AM IST

Oil Rises After Report OPEC, Allies to Discuss Deepening Cuts

A gas meter gauge stands at the oil and gas field processing and drilling site operated by Ukrnafta PJSC in Boryslav, Lviv region. (Photographer: Vincent Mundy/Bloomberg)

(Bloomberg) -- Crude oil held onto gains after an industry report showed exopanding U.S. inventories as OPEC and allied oil producers mull deepening supply cuts.

Futures settled 1.6% higher in New York on Tuesday before the American Petroleum Institute disclosed a 4.45 million-barrel increase in crude inventories, according to people familiar with the data. If confirmed by a government tally on Wednesday, it will be the longest run of gains in almost a year.

Prices rose earlier after Reuters reporter that members of the Organization of Petroleum Exporting Countries are concerned about the outlook for demand next year.

“The biggest piece of news is that OPEC is considering deeper cuts,” said Josh Graves, senior market strategist at RJ O’Brien & Associates in Chicago.“I think that’s something that needs to be done.”

U.S. benchmark futures have been under pressure for the past six months as the protracted U.S.-China trade war imperiled worldwide energy demand. President Donald Trump on Monday said negotiations are progressing, raising expectations that the world’s largest economies may sign a deal as soon as next month.

West Texas Intermediate crude for November delivery, which expired Tuesday, rose 85 cents to settle at $54.16 a barrel on the New York Mercantile Exchange. The more active December contract rose 81 cents to $54.32 at 4:59 p.m.

Brent for December settlement increased 74 cents to close at $59.70 on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a premium of $5.22 to WTI for the same month as of the close.

Other oil market news
Gasoline futures were little changed at $1.6092 a gallon. China’s demand for crude oil shows no signs of abating. There are currently more supertankers bound for the Asian nation than at any time since the start of 2017 and possibly longer. That could signal that China’s refineries are planning to run hard through the end of the year when the shipping industry is moving to cleaner fuel standards. Saudi Aramco is pushing to complete its initial public offering this year by relying more on local investors, after international money managers’ skepticism triggered a delay, people with knowledge of the matter said.

Other oil market news

Gasoline futures were little changed at $1.6092 a gallon.
China’s demand for crude oil shows no signs of abating. There are currently more supertankers bound for the Asian nation than at any time since the start of 2017 and possibly longer. That could signal that China’s refineries are planning to run hard through the end of the year when the shipping industry is moving to cleaner fuel standards.
Saudi Aramco is pushing to complete its initial public offering this year by relying more on local investors, after international money managers’ skepticism triggered a delay, people with knowledge of the matter said.

To contact the reporter on this story: Jacquelyn Melinek in New York at jmelinek@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Joe Carroll, Carlos Caminada