Crude oil futures rose on Tuesday after Saudi Arabia pledged to work towards oil price stability, while a strong U.S. dollar and an expected rise in US crude stocks kept the gains in check.
Brent futures for January climbed 23 cents to $45.06 a barrel as of 0658 GMT, while U.S. West Texas Intermediate (WTI) crude was up 32 cents at $42.07 a barrel, after hitting $42.18 earlier in the session.
“The focus is turning to the upcoming OPEC meeting and the hope that some production cuts will be forthcoming.
OPEC member comments leading into the December 4 meeting are likely to continue to drive sentiment,” ANZ said in a note on Tuesday.
Saudi Arabia led a shift by the Organization of the Petroleum Exporting Countries (OPEC) in November 2014 to defend market share against competing supplies, rather than cut output to prop up prices.
The kingdom’s cabinet said on Monday, though, it was ready to cooperate with OPEC and non-OPEC countries to achieve market stability, days before OPEC meets to review its year-long policy of not supporting prices.
Yet some doubted the Saudi comment would lead to any significant change in policy.
“As long as nothing concrete is being rolled out, we remain sceptical of the possibility. Therefore … we would think that the Dec 2015 OPEC meeting would be a non-event again,” Daniel Ang at Phillip Futures said on Tuesday.
ANZ added in its note that investors are awaiting U.S. crude stocks data, with expectations of a small increase.
US commercial crude oil stocks probably gained 1.1 million barrels for the week ended Nov. 20, according to a preliminary Reuters survey of five analysts on Monday. Another rise would be the ninth consecutive weekly gain.
“We still think that a low 40s NYMEX WTI is a floor from which the market can rally through the winter,” said BNP Paribas said in a research note.
“Thereafter, the summer of 2016 presents down risk for oil prices as OPEC pursues its current policy, U.S. production stabilises and Iran delivers more barrels to the market.”
Investor are betting more heavily on a fall in Brent crude oil than they have at any time in more than a year, according to data on Monday from the InterContinental Exchange (ICE).
The US dollar hovered near an eight-month high against a basket of currencies on Tuesday, keeping a lid on oil prices as a strong greenback make dollar-denominated contracts more costly for holders of other currencies.