Oil rises on boost from strengthening equities

  • Oil rises on boost from strengthening equities

Oil rises on boost from strengthening equities

U.S. West Texas Intermediate ended 2.9%, or $1.17, lower at $39.43.

Brent crude futures LCOc1 for December delivery settled up 87 cents, or 2.05%, at $43.32 a barrel.

"Oil prices, which suffered quite a blow the previous day, were looking for a bright spot and Tuesday offered just that", said Rystad Energy's senior oil markets analyst Paola Rodriguez-Masiu.

Perhaps we saw an overreaction to the IEA report on Wednesday. "Therefore, despite the initial enthusiasm, we find that the uptick in oil prices today is unjustified".

"The energy markets are certainly marching to their own drummer at the moment", said Michael McCarthy, chief market strategist at CMC Markets and Stockbroking, adding that recent oil price volatility may have attracted more trader positions.

OPEC+ had 100% compliance with a pact to cut oil supply in September was seen at 102%, two OPEC+ sources told Reuters. Analysts had expected a 1.607-million-barrel draw for the week.

Social restrictions were being tightened in Britain and the Czech Republic to battle rising cases of COVID-19, and French Prime Minister Jean Castex said he could not rule out local lockdowns.

In the United States, Hurricane Delta, which dealt the greatest blow to USA offshore Gulf of Mexico energy production in 15 years, was downgraded to a post-tropical cyclone by Sunday.

OPEC and producer allies such as Russian Federation, a group known as OPEC+, will stick to their plans to taper oil production cuts from January, Suhail al-Mazrouei, the energy minister of the United Arab Emirates said on Tuesday.

OPEC member Libya on Sunday also lifted force majeure at its Sharara oilfield.

The country's total output on Monday was at 355,000 bpd and will double if the Sharara field gets back to pumping at the 300,000 bpd it was producing before the Libyan National Army blockaded energy exports in January.

"For prices to rise further, we think elevated spare production capacity among OPEC+ needs to be reduced".

Currently, "we expect we will be able to gradually raise production, in line with the conditions of the agreement, without harming the market", Alexander Novak said in his column for the October issue of Energy Policy magazine. Both reports were delayed by a day because of a public holiday in the United States on Monday.