After renewed worries about an oil glut on Wednesday, and the 4 percent fall in oil price, Thursday oil prices seem to have stabilized. However Brent and WTI are still far from a rebound, and a close to five week lows. The data that caused the turmoil revealed that the United States’ oil production has surprisingly surged to 14 million barrels last week, bringing back oversupply concerns.
Ole Hansen, head of commodity strategy at Saxo Bank, explained, "Following a host of negative news, which culminated with another erratic U.S. inventory report, oil has stabilized and moved higher, driven by short-covering and the sense that it may have become too pessimistic about an OPEC deal being reached,"
According to Reuters OPEC had hoped that major non-OPEC producers, particularly Russia, would join any deal to cut production. While Russia has signaled this could be possible, crude output hit a post-Soviet record of 11.2 million barrels per day in October.
London broker PVM said explained his skepticism on a popssible deal with Russia, saying, "There is a massive market-share battle going on between Russia and Middle Eastern oil producers that sees Saudi oil ending up in Poland and Russian crude in traditional OPEC markets in the Far East."