NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled higher this afternoon, with West Texas Intermediate crude bouncing off a three-month low to a 13-day high, rallying on calls for domestic oil inventory draws and renewed expectations the Organization of Petroleum Exporting Countries will cut production when they meet in Vienna.
"There seems to be an increase in expectations that we'll get a deal done since Iran and Iraq are now both moving towards acceptance of a deal," said analyst Phil Flynn at Price Futures. "It's not done yet, but it's close, and the Saudis have also warned Donald Trump that the economy will suffer if the United States stops importing oil from them."
He said the oil market was oversold, so some of the rally was due to short-covering by speculative traders.
The market now awaits U.S. supply data for the week-ended Nov. 11 from the American Petroleum Institute late today and tomorrow morning from the Energy Information Administration.
A survey predicted the reports will show a 1.0 million barrel (bbl) crude stock draw and a 1.75 million bbl distillate stock draw while gasoline stocks are seen up 250,000 bbl.
NYMEX December WTI crude futures settled $2.49 or 5.7% higher at $45.81 bbl, off a 13-day high of $45.98. It was the biggest one-day jump since April. Options for the WTI contact expire tomorrow. ICE January Brent futures settled $2.52 higher at $46.95 bbl.
NYMEX December ULSD futures rallied 5.84 cents or 4.2% to $1.4439 gallon at settlement, and December RBOB futures soared 5.72 cents or 4.5% to $1.3350 gallon at the regular session close.
According to reports, several OPEC members are making a last-ditch diplomatic push to overcome divisions between Saudi Arabia, Iran and Iraq over how to share output cuts that were pledged in September. Iran and Iraq both seek to continue raising production while the Saudis are championing a production cut to stabilize the oil market.
Now, Venezuela, Algeria and Qatar are leading the charge to find common ground between the three rivaling key OPEC nations. Russia is also set to meet with Saudi Arabia this week to coordinate the cuts.
The position taken by Iraq and Iran runs counter to a Sept. 28 proposal to limit the group's oil production to a range of 32.5 to 33 million bpd, which would represent a reduction of between 640,000 bpd and 1.14 million bpd versus the cartels October output.
Since that pledge, OPEC members have been negotiating to no avail their output quotas. OPEC will make a final decision at its Nov. 30 biannual conference in Vienna.
George Orwel can be reached at email@example.com
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