Share

Oil prices wobble as traders await OPEC, China data

London - World oil prices diverged on Tuesday but held below the key level of $50 per barrel, as traders eyed this week's crucial OPEC oil meeting and key Chinese data.

Around 14:00, US benchmark West Texas Intermediate for delivery in July rose 26 cents to $49.59 per barrel.

Brent North Sea crude for July fell 18c to $49.58 a barrel compared with Monday's close.

Trading volumes were still thin after British and US financial markets were shut for a public holiday on Monday.

"With OPEC also meeting later this week ... there is little expectation that oil ministers are likely to come to any agreement on production quotas or freezes," said CMC Markets analyst Michael Hewson.

"However that scarcely matters, given the current direction of travel for oil which currently looks well supported just below the $50 a barrel level."

The Organisation of Petroleum Exporting Countries (OPEC) convenes Thursday in the Austrian capital of Vienna, for its first meeting with the powerful Saudi crown prince's new oil minister.

The recent recovery in prices has eased pressure on OPEC to turn down the taps at this week's scheduled output gathering, analysts say.

OPEC, which pumps around a third of the world's oil or some 30 million barrels every day, has historically responded to a fall in prices by cutting production.

But in the current cycle, which saw prices collapse from over $100 in 2014 to close to $25 this January, producers led by kingpin Saudi Arabia have changed strategy, maintaining output even with lower prices in order to pressure US shale producers.

"Although the market expects the OPEC meeting to end without reaching any agreement on production targets or production caps, oil prices have been faring well of late thanks to the high unscheduled supply outages," said Commerzbank analyst Carsten Fritsch.

Prices had topped $50 last Thursday as production disruptions in Canada and Nigeria eased short-term concerns about abundant global supplies.

However, crude futures remain less than half of their 2014 peaks due to a stubborn global supply glut.

Later this week, dealers expect Chinese manufacturing data due on Wednesday to set the tone. China is the world's largest energy consumer so any key data is also a key driver for oil prices.

The oil market had dipped on Monday after comments from the US central bank head Janet Yellen suggested interest rates could rise soon if the world's top economy continues to improve.

The expectation of a US rate hike pushed up the greenback, hurting dollar-denominated oil by making it more expensive for buyers with weaker currencies and denting demand.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.89
+0.3%
Rand - Pound
23.87
+0.1%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.32
+0.1%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders