Oil prices bounce back on eve of OPEC meeting

Oil prices bounce back on eve of OPEC meeting
Updated on

Summary Oil prices rose on Thursday on the eve of OPEC meeting in Vienna.

NEW YORK (AFP) - Oil prices rose Thursday as traders hedged their bets in case OPEC surprises the market and takes decisive action in response to tighten supplies.

US benchmark West Texas Intermediate added $1.14 at $41.08 a barrel on the New York Mercantile Exchange, making up some of the ground lost in the prior session, when WTI finished below $40 for the first time since August.

Brent North Sea crude for January delivery rose $1.35 to $43.84 a barrel in London.

Traders still do not expect Friday s meeting of the Organization of the Petroleum Exporting Countries to result in a significant change from a year-long policy to keep production high in order to try to lock in market share.

However, investors were also a bit nervous in case the Vienna gathering confounds expectations.

"I think there s a lot of fears that there s a potential for a December surprise whereby the Saudis come across with some kind of scheme for next year to reduce output," said John Kilduff, founding partner of Again Capital.

"And so I think there are a lot of people who were short going into this meeting, getting scared out."

Thursday s buying was "fairly predictable considering we have a meeting," said Gene McGillian, broker and analyst at Tradition Energy. "We could see a surprise for where the market is."

However, both Kilduff and McGillian said oil could be primed for further declines if Friday s meeting yields no significant action. Crude supplies remain at lofty levels and the market anticipates more oil coming on line from Iran once sanctions ease, expected early in 2016.
 

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