: Crude-oil futures were weak in Asian trade Wednesday after sharp overnight losses and traders said large price swings will continue as markets lap up news headlines in the run up to OPEC’s meeting in Vienna on Thursday.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January CLF5, -0.30% traded flat at $74.09 a barrel in the Globex electronic session. January Brent crude LCOF5, -0.27% on London’s ICE Futures exchange rose $0.06 to $78.39 a barrel.
Nymex WTI crude settled at its lowest value since September 21, 2010 in the previous trading session after reports that oil producers Saudi Arabia, Venezuela, Mexico and Russia had met but didn’t decide on supply cuts. The Wall Street Journal had earlier reported that OPEC members appeared to be inching toward a deal led by Saudi Arabia.
The Organization of the Petroleum Exporting Countries will meet on November 27 to decide on lowering oil production levels to alleviate the current glut in global markets and boost oil prices. Uncertainty and speculation surrounding OPEC’s decision has markets on edge.
“To be clear, depending on what happens, the OPEC meeting has the potential to set the stage for the markets going forward–not just in the short term, but in the long term too,” Michael Wittner, Societe Generale’s head of oil research said.
He has set a base case in which the oil cartel makes a convincing and meaningful production cut of 1.0-1.5 million barrels a day, shared by most of its members. “We give our base case a 60% probability,” Mr. Wittner said.
Late Tuesday, the American Petroleum Institute said its data showed a 2.8-million-barrel rise in U.S. oil stockpiles for the week ended Nov. 21. The U.S. Energy Information Administration will publish more closely watched data later Wednesday, and analysts expect a drop of 100,000 barrels.
Financial markets will face a deluge of U.S. economic data today ahead of the Thanksgiving holiday on Thursday. Markets are also supported by the third quarter U.S. GDP growth at 3.9% released Tuesday.
Nymex reformulated gasoline blendstock for December RBZ4, +0.03% –the benchmark gasoline contract–rose 10 points to $2.0328 a gallon, while December diesel traded at $2.4157, 209 points higher.
ICE gasoil for December changed hands at $693.75 a metric ton, down $0.50 from Tuesday’s settlement.