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Oil Prices Rise on Hopes of Output Accord

Expectations Hillary Clinton can secure the U.S. presidency also supports prices


Written by Alison Sider, Kevin Baxter & Jenny W. Hsu

Click HERE to Read the Article by the Publisher.

screen-shot-2016-11-08-at-9-41-38-amOil prices were up along with the broader market Monday, after the FBI said it had not found new evidence to warrant charges against presidential candidate Hillary Clinton, and amid renewed hope that the world’s major oil producers will come to an agreement regarding production cuts.

U.S. crude futures rose 82 cents, or 1.86%, to $44.89 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 57 cents, or 1.25%, to $46.15 a barrel.

Analysts said oil was also benefiting from increased appetite for risky assets amid growing confidence that Hillary Clinton could prevail over Donald Trump in Tuesday’s presidential election. Equity markets have also rallied as investors interpreted the FBI’s announcement as favorable to Mrs. Clinton’s chances and removing a key element of uncertainty.

“The stock market likes it, and the oil market likes it as well,” saidPhil Flynn, senior market analyst at The Price Futures Group.

But strength in the U.S. dollar limited oil’s rise. The WSJ Dollar Index, which measures the dollar against other currencies, rose 0.53% Monday. A stronger dollar can make oil, which is traded in dollars, more expensive for buyers using foreign currencies.

Also bolstering oil markets Monday, the Organization of the Petroleum Exporting Countries reaffirmed its commitment to cutting output. OPEC Secretary-General Mohammed Barkindo said Monday that the cartel remains committed to the tentative accord the group reached in Algiers in September, and that Russia remains on board with the plan to limit output.

The statements followed reports of disagreements between OPEC members that stoked fears that the continuing talks about production cuts won’t lead to a deal at the group’s meeting in Vienna on Nov. 30. Both crude benchmarks lost about 10% last week on growing skepticism about a deal and a record 14.4-million-barrel rise in U.S. oil stocks.

“Now the whispers sound like there is going to be a deal,” said Chip Hodge, senior managing director at John Hancock Financial Services. “There’s a lot of talk, and until we actually see an agreement, speculation moves things up or down.”

Analysts said the market may have been too hasty to write off the prospects for a deal.

“OPEC often reaches agreements in a fairly noisy way and, like many organizations, it rarely reaches a definitive deal before a deadline,” Standard Chartered analyst Paul Horsnell wrote in a client note.

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Written by Alison Sider, Kevin Baxter & Jenny W. Hsu

Click HERE to Read the Article by the Publisher.