Oil gains above $50 amid OPEC output cut plans

Bloomberg

Oil rose as the dollar weakened, edging back above the $50 level where prices have hovered since rallying on OPEC’s decision to cut output last month.
West Texas Intermediate futures advanced 1 percent in New York, erasing Monday’s 0.8 percent slide. The dollar sank, increasing the appeal of commodities denominated in the currency, on speculation that a pick-up in the global inflation outlook won’t tempt the Federal Reserve to quicken the pace of monetary tightening. U.S. crude inventories probably added 2.1 million barrels last week, a Bloomberg survey showed before government data Wednesday.
Oil is up about 13 percent since the Organization of Petroleum Exporting Countries reached a deal Sept. 28 in Algiers to manage supply, and prices have closed slightly above $50 a barrel for six of the last eight sessions as investors await a meeting next month where the group is scheduled to implement the agreement. An OPEC committee will meet later this month to try to resolve differences over how much individual members should pump.
“The oil price is consolidating,” Chris Weston, chief market strategist at IG Ltd. in Melbourne, said by phone. “The market has priced in the good OPEC news. It’s unlikely that we’ll see a collapse in oil; we’d need to see something pretty disappointing as we
head into the November meeting for that to happen.”
West Texas Intermediate for November delivery was at $50.43 a barrel on the New York Mercantile Exchange, up 49 cents, at 11:57 a.m. in London. The contract dropped 41 cents to $49.94 a barrel on Monday, declining a second day. Total volume traded was about 17 percent below the 100-day average.