Oil prices surge as U.S. equities soar


Brent crude recovered after dipping below $50/bbl for the first time since July 2017 on the strength of a rebound by USA stocks and a hint that OPEC and its partners could meet again to discuss output curbs.

At the same time, the growth in non-OPEC supply appears to have stalled as updates from the U.S. Energy Information Administration (EIA) show production holding steady at 10,600K in the week ending December 14, and signs of slowing output may foster a near-term correction in crude especially as the International Energy Agency (IEA) warns that the economic slowdown in Venezuela paired with the sanctions on Iran may lead to unintended consequences that would exacerbate the drop in global output.

US West Texas Intermediate (WTI) crude futures fell 0.19 percent to $46.13 per barrel. EOG Resources (EOG), a big US shale producer, was flat. Asian stock markets retreated again on Wednesday.

"The planned cuts have been carefully studied, but if it doesn't work, we always have the option to hold an extraordinary OPEC meeting and we have done so in the past", Suhail Al Mazrouei, who is also OPEC president, said in Kuwait. They rose 8 percent to $54.47 a barrel the day before.

At a press briefing in Kuwait, Iraqi, the U.A.E. and Algerian energy ministers took turns repeating the message that OPEC will deliver its 800,000 barrels per day cut and continue their cooperation with other producers to balance supply and demand.

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Last month, Saudi Arabia supplied 6.56 million tons, or 1.596 million barrels per day (bpd) of oil, up 50 percent from a year earlier, according to the data. At the same time, an ongoing trade war between the USA and China, and the Federal Reserve's policy on interest rates has led to concerns over the global economic outlook.

"I think there is a little bit of over-extension to the downside linked to global market fears".

The Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russian Federation, agreed at a meeting earlier this month to limit output by 1.2 million barrels per day starting in January. Bloomberg quoted a Rakuten Securities analyst as saying, "There are several bearish factors in oil markets, and the situation won't improve anytime soon".

"But if OPEC's cuts are fulfilled, WTI prices are expected to rise to $50-60 a barrel, while Brent is expected to go up to between $58-70 a barrel next year". It prior tumbled to $49.93, the least since July 2017, and posted a 6.2 percent slide in the past session.

On London-based ICE Futures, the price of Brent crude oil to be delivered in February advanced by $4.86, to $55.29 a barrel.