On Wednesday, oil prices were suddenly higher during European hours, after declining to a six week low overnight, as market participants anticipate fresh weekly information on U.S. stockpiles of crude and refined products.
The U.S. Energy Information Administration will post its weekly report on oil supplies at 10:30AM ET (14:30GMT) during analyst expectations for a surge of 3.4 million barrels.
While stocks of distillates, which consist of heating oil and diesel, are predicted to increase by 250,000 barrels, gasoline inventories are anticipated to decline by 567,000 barrels.
After markets closed Tuesday, the American Petroleum Institute stated that U.S. oil inventories drop by a huge 7.5 million barrels during the week ended September 16. The American Petroleum Institute (API) report also presented a decline of 2.5 million barrels in gasoline stocks, while distillates presented an increase of 1.4 million barrels in the week.
Delivery of crude oil for November on the New York Mercantile Exchange increase 93 cents, or 2.1%, to $44.98 a barrel by 3:50AM ET (07:50GMT). On Tuesday, the deal reached a six week low of $43.06 during remaining concerns over a global supply excess.
Somewhere else, on the ICE Futures Exchange in London, delivery of Brent oil for November add on 80 cents, or 1.75%, to trade at $46.68 a barrel, moving away from the previous session’s six week low of $45.09.
Oil traders continued to influence prospects that major oil producing nations will freeze production to support the market when they meet next week.
Organization of the Petroleum Exporting Countries members, led by Saudi Arabia and other big Middle East crude exporters, will meet non-OPEC producers led by Russia at informal talks in Algeria between September 26 and 28.
According to market experts, the probabilities that the meeting would yield any action to lessen the global surplus looked minimal. Instead, many believe that oil producers will continue to observe the market and perhaps delay freeze talks to the official OPEC meeting in Vienna on November 30.
An effort to jointly freeze output levels prior this year failed after Saudi Arabia backed out over Iran’s rejection to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.
Later in the day, the market is also waiting for the results of the Federal Reserve meeting, for additional trading indications.
The BoJ kept rates unmoved at -0.1% after its recent meeting and broadcasted that it would modify its policy framework, marking the recent attempt to increase inflation.
Among the changes, the Bank of Japan stated it would introduce yield curve controls, remove the maturity range of its bond purchases and discard its monetary base goals.
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