NEW YORK – Oil prices stabilised on Tuesday (Sep 20) in the run-up to a producers meeting next week, while traders were also awaiting the release of US stockpiles data.
In New York trade, US benchmark West Texas Intermediate for October rose 14 cents to US$43.44 a barrel. In London, Brent North Sea crude for delivery in November lost 13 cents to US$45.88 a barrel.
Prices were lower in early trade but rebounded later in the day.
“We’ve had Russia saying they would support a production freeze so we saw a quick reverse on prices which rallied until the closing,” said Matt Smith of Clipperdata.
He also said that swings in the market related to the looming close of the October contract for WTI. “You’ve got a lot of volatility on the last day because people need to square their books,” he said.
Russia’s comments bolstered hopes that the producer talks by the 14-nation OPEC cartel and Russia in Algeria from Sep 26-28 could reach a deal that would at least put a floor on crude prices.
But some analysts said that in the absence of any firm agreement, prices will continue to swing.
“The credibility of bullish production freeze rhetoric from Venezuela is understandably being questioned in the run-up to next week’s Algiers meeting, while worries about additional supply (Nigeria, Libya) worsening the global glut add to the mix,” noted analysts at traders Accendo Markets.
Meanwhile, the US energy department is due to release the stockpiles figures on Wednesday.
“Many analysts predict a significant increase in US inventories of over two million barrels, which would indicate ongoing global oversupplies,” said analyst Bill Hodder at broker Love Energy.