Oil trades near $48 as OPEC seek agreement on production curbs

Bloomberg

Oil traded near $48 a barrel as OPEC members sought to reach an agreement on output cuts.
January crude fluctuated in New York, rising as much as 2 percent after dipping 1.1 percent. The details of a deal will be finalized Tuesday and “everybody is on board,” Nigerian OPEC delegate Ibrahim Waya said in Vienna, where the group is meeting to discuss output quotas ahead of a summit next week. Libyan OPEC Governor Mohamed Oun said Monday that talks had gone well.
Oil has rebounded from an eight-week low on Nov. 14 as members of the Organization of Petroleum Exporting Countries make renewed diplomatic efforts before their Nov. 30 meeting to finalize the supply deal they informally agreed to in September. The group’s plan to trim output for the first time in eight years is complicated by Iran’s determination to boost volumes, a revival of production in Nigeria and Libya, and Iraq’s request for an exemption.
“The market is going to move on OPEC headlines until the meeting in a little more than a week,” said Gene McGillian, manager of market research for Tradition Energy in Stamford, Connecticut. “We should float around in this area until next Wednesday. I doubt prices will top $50 unless the Saudis make a statement.”
West Texas Intermediate for January delivery rose 2 cents to $48.26 a barrel at 9:45 a.m. on the New York Mercantile Exchange. December futures expired on Monday after rising $1.80 to $47.49, the highest close for a front-month contract since Oct. 28. Total volume traded was more than double the 100-day average.
Brent for January settlement rose 26 cents to $49.16 a barrel on the London-based ICE Futures Europe exchange. The contract touched $49.96, the highest since Oct. 28. The global benchmark traded at a 90-cent premium to WTI.
OPEC representatives meeting in Algiers in September proposed limiting output to a collective 32.5 million to 33 million barrels a day. That remains the main proposal being considered, Nigeria’s Waya said. “Everyone knows that the stakes are high,” he said.
In the U.S., government data Wednesday is forecast to show crude inventories rose by 250,000 barrels last week, according to a Bloomberg survey. The industry-funded American Petroleum Institute is scheduled to release its weekly data this afternoon.

Oil-market news
The likelihood of an OPEC deal drove an increase in the oil-price outlook at Goldman Sachs Group Inc., which now expects WTI at $55 in the first two quarters of next year, up from prior estimates of $45 and $50, respectively, according to a note on Monday. The chairman of the Commodity Futures Trading Commission is trying to push ahead with controversial rules clamping down on traders’ ability to speculate in oil and other commodities before President-Elect Donald Trump takes office, according to people familiar with the matter.