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Oil Stays Above $50 Even with Doubts over OPEC Deal

December 8, 2016 at 18:14 by Andrew Moran

Oil prices are slightly rebounding on Thursday even with traders remaining doubtful that Organization of the Petroleum Exporting Countries (OPEC) members and non-members will agree to a production cut in the next couple of days. Oil has been slumping for the past few trading sessions, though oil has managed to stay above $50.

January West Texas Intermediate (WTI) crude futures rose $0.70, or 1.41%, to $50.47 per barrel at 16:46 GMT on Thursday on the New York Mercantile Exchange. This comes as US crude settled 2.3% lower on Wednesday, which was its worst finish in a week.

Brent has also been able to make gains as the trading week comes to an end. February Brent crude futures climbed $0.62, or 1.17%, to $53.62 a barrel.

OPEC and non-OPEC oil producers will meet this weekend in Vienna. The meeting will see OPEC leaders encourage non-OPEC members, like Russia, to slash their oil output levels. The recent declines come over fears that non-OPEC members will not be scared enough to agree to cut their production efforts.

Late last month, OPEC agreed to reduce their output levels for the first time in eight years. The 14-member oil cartel arranged to cut production by 1.2 million barrels per day (bpd) in the first half of 2017. This was meant to boost crude futures while lowering global oil supplies. Some experts still doubt that the amount was enough and if the cuts would be effectively installed.

Traders will now wait to see if non-OPEC producers will cut back on their production levels. OPEC has previously reported that non-OPEC members would agree to a cut of 600,000 bpd, with Russia representing roughly half of that total. Other oil producers, like Azerbaijan, say they are coming to the Vienna meeting equipped with their own set of proposals.

The next official OPEC meeting will be held on May 25, 2017 in Vienna.

Meanwhile, the Energy Information Administration (EIA) said on Wednesday that there was an immense increase in stockpiles, which was described as the biggest weekly build since 2009 by officials.

If you have any questions and comments on the commodities today, use the form below to reply.

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