NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled mixed with an upside bias this afternoon with crude rebounding from a one-week low amid hope that nonmembers of Organization of Petroleum Exporting Countries will agree to cut their production this weekend, in coordination with OPEC.
On Nov. 30, OPEC agreed to cut in production by 1.2 million barrels per day (bpd) to 32.5 million bpd starting Jan. 1, 2017 in anticipation that non-OPEC would join the effort by cutting their own supply by a combined 600,000 bpd, with Russia responsible for 300,000 bpd of the total cuts.
The meeting set for Saturday (12/10) in Vienna is for OPEC and non-OPEC to work out the details and firm the pledge. There had been worries in the market earlier that the meeting might not take place after only five of the 14 non-OPEC producers indicated they would attend.
Just before noon Eastern Time, West Texas Intermediate and Brent crude oil futures both flipped into negative territory briefly amid reports Russia saw a risk of the meeting being moved. However, a Russian spokeswoman said the meeting would continue as planned, with those comments prompting the rebound in crude futures.
"People freaked out when there was a news headline that the meeting had been delayed, but when Russia said the meeting is still on, we went back up," said analyst Phil Flynn at Price Futures. "I think there's now an expectation that non-OPEC countries will agree to cut production."
He added, "Heating oil is up because winter is coming, so there's demand, but gasoline fell because demand will be curtailed if we get too much snow."
At settlement, NYMEX January WTI crude futures gained $1.07 to $50.84 per barrel (bbl), reversing off a one-week low of 49.61, and February Brent crude futures on the IntercontinentalExchange rallied 89 cents to $53.89 bbl.
NYMEX January ULSD futures edged up 0.75 cent to $1.6259 gallon at settlement, and January RBOB futures settled 0.30 cent lower at $1.5047 gallon.
Early gains for crude futures were based on Energy Information Administration data showing a 2.4 million bbl decline in U.S. crude stockpiles for the week-ended Dec. 2, as well as on the initial brief decline by the U.S. dollar to a three-week low before the greenback reversed higher.
George Orwel can be reached at firstname.lastname@example.org
© Copyright 2016 DTN/The Progressive Farmer. All rights reserved.