Oil prices are slightly higher Thursday as traders are increasingly optimistic that the global cartel of oil exporters will move to tighten the market.
The Organization of the Petroleum Exporting Countries meets on Nov. 27, and investors are seeking guidance on whether production will be reduced to prop up prices that have fallen more than 30% since June. Odds are growing that they will either cut production or more rigorously enforce their own production quotas, Simmons & Co. International said Thursday in a research note.
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Brent crude, the global oil benchmark, rose 68 cents, or 0.9%, to $78.78 a barrel on the ICE Futures Europe exchange. Light, sweet crude for December delivery rose 34 cents, or 0.5%, to $74.92 a barrel on the New York Mercantile Exchange.
"We feel that WTI crude futures would be trading into new multiyear-low territory this morning if not for seller caution ahead of the upcoming OPEC meeting," Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates, said in a note.
The oil market has been falling in large part because of strong supply. Prices slid lower Wednesday when inventory data showed that U.S. crude-oil stockpiles rose by 2.6 million barrels compared with analysts' expectations that they would fall by one million barrels.
OPEC production is also strong, hitting between 30.25 million and 31 million barrels a day in October, Commerzbank analysts noted. The International Energy Agency and OPEC estimate that the need for oil from the group is only 29.2 million barrels a day.
A small change would therefore "not be sufficient to halt the slump in oil prices," Commerzbank said.
"OPEC will probably see itself forced at a later date to agree on a more drastic production cut that better reflects the lower [demand for its oil]," they said.
December reformulated gasoline blendstock, or RBOB, recently rose 0.7 cent, or 0.3%, to $2.0508 a gallon.
December diesel gained 1.52 cents, or 0.6%, to $2.3742 a gallon.