18 Nov Oil prices rise slowly to mixed signals
Oil prices faced mixed signals early Wednesday from a bigger-than-expected build in U.S. crude stocks and weaker U.S. retail sales; and hopes that OPEC and its allies will delay a planned rise in oil output lent support.
Brent crude futures for January rose 3 cents, or 0.1%, to $43.78 a barrel by 0430 GMT, while U.S. West Texas Intermediate crude for December eased 3 cents, or 0.1%, to $41.40 a barrel.
The American Petroleum Institute (API) said on Tuesday that U.S. crude stockpiles rose by 4.2 million barrels last week, well above analysts’ expectations in a Reuters poll for a build of 1.7 million barrels.
U.S. retail sales increased less than expected in October, restrained by spiraling new COVID-19 infections and declining household income as millions of unemployed Americans lose government financial support.
To tackle weaker energy demand amid a new wave of the COVID-19 pandemic, Saudi Arabia called on fellow members of the OPEC+ grouping – OPEC and other producers including Russia – to be flexible in responding to oil market needs as it builds the case for a tighter production policy in 2021.
“Hopes that OPEC+ will keep existing cuts further into 2021, or even increase the cuts, underpinned prices,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
He predicted WTI will stay boxed into a range of $39 to $44 a barrel until a full meeting of the Organization of the Petroleum Exporting Countries (OPEC) later this month.