Oil Reverses Overnight Pullback in Asia Ahead of OPEC Meeting

By Biman Mukherji Features Dow Jones Newswires

Oil prices rebounded in Asia following some overnight profit-taking as investors undertake their last positioning ahead of later Thursday's meeting of the Organization of Petroleum Exporting Countries.

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Finalization of an extension to ongoing production cuts is widely expected to be announced, as might an agreement to make output reductions even deeper than they now are in hopes of pushing down still-heavy global stockpiles.

West Texas Intermediate for July delivery on the New York Mercantile Exchange recently traded 0.7% higher at $51.72 a barrel in the Globex electronic session. Brent crude, the global benchmark, climbed 0.8% to $54.38.

Wednesday's decline, the first in a week, came despite what was upbeat U.S. inventory data. The reaction highlighted that after the sharp price rebounds in the oil pits the past 2 1/2 weeks, bulls wanted to lock in some gains.

And amid those recent gains, "you would need something extra to get high momentum" for further rally, said OM Financial's Stuart Ive. If the result is just a deal extension, oil is likely to trade from $50 to $60 a barrel near-term, with the possibility of some consolidation, he added.

Consultancy Wood Mackenzie added a nine-month extension would make no change to its 2017 price forecast of $55. But an increase to current reductions of 1.8 million barrels a day could push Brent toward $60 by year-end.

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Nymex July gasoline futures were recently up 0.7% at $1.6587 a gallon, diesel climbed 0.8% to $1.6234 and ICE gasoil added 0.4% to $482 per metric ton.

Write to Biman Mukherji at biman.mukherji@dowjones.com

(END) Dow Jones Newswires

May 25, 2017 00:12 ET (04:12 GMT)