Futures in New York rose as much as 1.5 percent. Traders are awaiting this week’s G-20 gathering in Argentina, which will include Saudi Crown Prince Mohammed Bin Salman and Russian President Vladimir Putin, before OPEC meets next week in Vienna.
Oil held onto a second day of gains as the focus shifted to whether OPEC and its partners will cut supplies enough to check fears of a looming surplus of crude.
Futures in New York rose as much as 1.5 percent. Traders are awaiting this week’s G-20 gathering in Argentina, which will include Saudi Crown Prince Mohammed Bin Salman and Russian President Vladimir Putin, before OPEC meets next week in Vienna. Analysts and traders in a Bloomberg survey predicted that the final gathering will produce an output cut to shore up prices.
America’s unexpected sanctions waivers for Iranian oil, record Saudi output and rising trade tensions have sent crude into a bear market. While Saudi Arabia wants a production cut to support prices, the market is abuzz with talk that Prince Mohammed bin Salman may not be able to defy President Donald Trump’s call for lower prices after the White House supported him following the killing of Jamal Khashoggi.
“The market’s taking a breather and waiting to look at the key goalposts that are coming up,” said Michael Tran, director of global energy strategy at RBC Capital Markets. “The main question that the market needs some sort of clarity on is what OPEC is going to be able to do.”
West Texas Intermediate for January rose 47 cents to $52.10 a barrel on the New York Mercantile Exchange at 10:53 a.m. in New York. The contract rose $1.21 on Monday after plunging about 11 percent last week, the most since January 2016. The Cboe/Nymex WTI Volatility Index fell on Monday after reaching the highest level since early 2016 on Friday.
Brent for January settlement rose 57 cents to $61.05 a barrel on London’s ICE Futures Europe exchange, after adding $1.68 on Monday. The global benchmark traded at a $8.85 premium to WTI.
On Monday, Goldman Sachs Group Inc. forecast the G-20 meeting would be a potential turning point, while Citigroup Inc. said it’s in the interest of Saudi Arabia and Russia either to freeze production or take oil out of the market.
“The market mood changed unexpectedly swiftly and pronouncedly from shortage fears to glut concerns,” said Norbert Ruecker, head of macro and commodity research at Julius Baer Group Ltd. in Zurich. “The focus is now on soft demand, the shale boom, and the petro-nations’ wide-open oil taps.”
Meanwhile, crude stockpiles in the U.S. probably fell 1 million barrels last week after nine consecutive weeks of gains, according to the median estimate in a Bloomberg survey. Inventories in the Cushing storage hub in Oklahoma probably added 600,000 barrels last week, according to a separate survey.
Other oil-market news Gasoline futures rose less than 1 percent to $1.4482 a gallon. Thirty-one of 36 analysts and traders in a global poll predicted that the coalition of producers led by OPEC and Russia will announce output curbs at a Dec. 6-7 meeting. The average estimate for the size of the cut was 1.1 million barrels a day. Kuwait’s oil minister said it’s too early to talk about output cuts, though OPEC and its allies will work to ensure market stability. Europe’s diesel market, already reeling from weeks of low water levels on the Rhine River, is now contending with a major refinery strike in France.