Oil futures: Crude higher amid volatile trade, hopes for OPEC+ deal
Quantum Commodity Intelligence – Crude oil futures Wednesday were around 1% higher on the session amid choppy trading, with the deadline for a deal in time for Thursday's OPEC+ ministerial meeting fast approaching and talks set to go to the wire.
Feb24 ICE Brent futures were trading at $82.37/b (1730 GMT), compared to the day's range $80.72-$82.80/b and Tuesday's settle of $81.47/b. The Jan24 contract was trading $82.59/b heading into the expiry.
At the same time Jan24 NYMEX WTI was trading $77.46/b versus Tuesday's settle of $76.41/b.
Updates on OPEC+ talks have been limited to off-the-record media briefings, and while talks with Nigeria and Angola over baseline and quota levels for next year are continuing, leaks to newswires from OPEC+ delegates late Wednesday suggested talks would go down to the wire, but details have been sketchy.
"The official meeting is scheduled to go ahead on 30 November while there are rumors that progress is being made with African nations that are worried about their quotas that caused the meeting to be delayed. When it comes to details leaking out, so far the silence is deafening," said Phil Flynn of The Price Futures Group.
Flynn also flagged a potential rift between Riyadh and Moscow, with Russia's exports again creeping higher and above agreed levels, although reports there are no plans for a call between President Putin and the Saudi Crown Prince were largely brushed off by the market.
Crude also remained on course for a second monthly decline after Brent ended last October at around $85/b and WTI at $81/b.
Inventories
Prices also wobbled as latest inventory data from the EIA's weekly Petroleum Status Report revealed an across-the-barrel drop in stocks for a second consecutive week, while US output held at a record 13.2 million bpd.
Earlier in the session, market reaction was muted to the latest data from the American Petroleum Institute, with crude inventories dropping 800,000, falling short of expectations for a 2 million barrel draw.
Gasoline stocks dropped 900,000 barrels, although this was offset by a 2.8 million barrel build in distillate stocks, the first in over a month, according to API figures.
Meanwhile, a severe storm in the Black Sea region has caused major disruption to both output and exports from Kazakhstan, with production cut by over half at the country's largest oil fields. According to local weather agencies, windy conditions could last into next week, causing major delays to Black Sea loadings.
Weather models showed only brief lulls in high winds on the Black Sea around Novorossiysk out to the weekend, with gusts of roughly 40 kmph reported around 1545 London time. Conditions are currently set to calm overnight and through much of Thursday, although charts show strong winds picking up again on Friday and Saturday.
On the economic front, US consumer confidence bounced in November, rising 2.9 points to 102 points and coming after three consecutive monthly declines, although mixed signals came from Federal Reserve officials.
Fed Governor Christopher Waller indicated in comments Tuesday that the rate-hiking cycle could be over, but Fed Governor Michelle Bowman suggested that current levels may not be enough to bring inflation back to the 2% target.
