SINGAPORE (Reuters) – Oil prices rose by more than 1 percent on Wednesday ahead of OPEC meeting next week at which the producer club is expected to decide some form of supply cut to emerging glut.
FILE PHOTO: Oil pumps are seen after sunset outside Vaudoy-en-Brie, near Paris, France November 14, 2018. REUTERS / Christian Hartmann
The shutdown of Britain's largest North Sea oilfield for repairs also supported prices, traders said.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $ 52.24 per barrel at 0607 GMT, up 68 cents, or 1.3 percent from their last settlement.
International Brent LCOc1 crude oil futures were up 78 cents, or 1.3 percent, at $ 60.99 per barrel.
The Buzzard oilfield, which pumps about 150,000 barrels per day (bpd) has closed temporarily after the discovery of pipe corrosion. As a result, trade sources have been canceled.
"The shutdown … is reducing the supply of a North Sea crude that helps set global prices," said Sukrit Vijayakar, director of Energy Consultancy Trifecta, referring to Buzzards' role in the settlement of Brent futures.
Despite Wednesday's rise, oil prices have still lost around 30 percent in value since early October, weighed down by emerging supply overhangs and widespread weakness in financial markets.
The crude oil price slump since October is so far on the 2008 price of crashes and steeper than that of 2014/2015.
(GRAPHIC: Brent crude oil price slumps of 2008, 2014/2015 & 2018 in percent – tmsnrt.rs/2RiWkJ1)
The Organization of the Petroleum Exporting Countries (OPEC) will meet at the headquarters in Vienna, Austria, on Dec. 6 to discuss output policy.
The OPEC-meeting will be held by the Group of 20 (G20) nations, which includes the biggest economies, in Argentina this weekend, at which the Sino-American trade policy is also expected to be discussed.
While most analysts expect some form of supply cut from the OPEC meeting, sentiment in oil markets remains negative.
"The focus on downside risks follows a 30 percent slide in WTI," Erik Norland, senior economist at commodities exchange CME Group wrote in a note, referring to higher numbers of traders who have placed positions that would profit from a further fall. in crude prices than those placing bets on a rising market.
Portfolio managers have slashed their combined net long positions in crude futures by a total of 607 million barrels over the last eight weeks, the largest reduction over a period of at least 2013, when the current data series began, exchange data showed.
A concern for global markets is a slowdown in global trade as a result of the Sino-American trade dispute, swelling debt and strong dollars that puts pressure on emerging markets.
The World Trade Organization (WTO) said in its latest outlook, published on Tuesday, that "growth is likely to be fourth quarter of 2018", with growth likely at its slowest since Oct. 2016
(GRAPHIC: outlook for the World Trade Organization (WTO) – tmsnrt.rs/2RlhEOc)
Reporting by Henning Gloystein; editing by Richard Pullin