Brent crude had risen 14 cents to $45.60 per barrel by 6:52 pm, after settling down 71 cents at $45.46 in the previous session.
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Oil has slumped about 36 percent in the past year as US crude inventories climbed to near a record and the Organization of Petroleum Exporting Countries pumped above its quota to defend market share.
But if OPEC fails to stick to this and announces any changes next Friday, this could cause a so-called “short squeeze” on the market.
“US crude oil inventories are not increasing as much as before, so this is giving the market some bullish sentiment”, said Daniel Ang, an investment analyst with Phillip Futures in Singapore.
Brent for January settlement advanced 5 cents to end the session at $46.17/bbl on the London-based ICE Futures Europe exchange.
Traders were looking ahead also to next week’s OPEC meeting for signs on whether the oil-producing cartel would slash high production levels.
Last week, Venezuelan Oil Minister Eulogio Del Pino assured oil prices could fall to the mid-$20s a barrel if the market does not stabilize soon. Spot gold rose slightly to $1,072.70 an ounce by 0634 GMT, after dropping 0.4 percent on Wednesday.
With geopolitical factors ebbing, macroeconomic concerns put downward pressure on crude oil prices in early Wednesday trading.
But Schieldrop added that the shooting down of a Russian jet by the Turkish military this week had also morphed from a geopolitical risk concern into worries about falling oil demand due to potential economic sanctions.
A reduction in oil output would likely have consequences for bunker buyers, with oversupply, and the resulting global oil glut, having pushed bunker prices this year down to their lowest in over 10 years.
Data from the US Department of Energy released yesterday showed that the country’s commercial crude supplies rose 1.0 million barrels for the week ended November 20.
“We’ve grown nearly three times faster than Japan, twice as fast as France, faster than Germany and at the same rate as the United States”, he said.
WTI for January delivery rose 17 cents to close at $43.04/bbl on the New York Mercantile Exchange.
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So it may be with more than a little disbelief that market observers view the latest news from Saudi Arabia, even though the immediate reaction triggered nominal increases to Brent and WTI futures on Monday.
