Oil Prices Rise Ahead of OPEC Meeting

Published Date : Oct 20, 2015

Prices of oil went up on Tuesday as traders braced themselves ahead of the weekly US inventory data and a meeting of the Organization of Petroleum Exporting Countries in order to control the global glut.

Sweet and light crude oil to be delivered in November recently gained 0.6 per cent or 26 cents to reach US$ 46.15 per barrel on the New York Mercantile Exchange. The November contract comes to an end at settlement on Tuesday. The December contract, the more actively traded one of the two, went up 0.7 per cent or 30 cents to settle at US$ 46.58 per barrel. 

The global benchmark Brent went up 0.3 per cent or 14 cents to reach US$ 48.75 per barrel on ICE Futures Europe. 

Prices on oil slid on Monday amidst concerns that China’s weaker economic growth would restrict the fuel demand in the country and that fresh Iranian exports would add to the pressure of the glut in the crude market. 

However, on Tuesday, traders anticipated the weekly US inventory data that is due on Wednesday. Even though analysts are still finalizing their estimates, many anticipate that the report will reveal that the stockpiles of crude oil rose last week while supply of gasoline and other fuels dropped. 

Analyst at brokerage Tradition Energy Gene McGillian said that they continue to move sideways. People still need to witness additional indications that the production is reducing and only then will the market lift its head up. The demand portion of the market continues to remain mixed at this time. 

Traders who had placed their bets on lower prices might also be wrapping up those positions before the November contract expires, which will lend a further boost to the prices of crude. 

OPEC members as well as non-OPEC countries such as Mexico and Russia will be meeting in Vienna on Wednesday