Oil volatile as U.S. crude build faces OPEC freeze hopes

Wed Nov 16, 2016 1:09pm EST
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By Scott DiSavino

NEW YORK (Reuters) - Oil prices were little changed in volatile trading as the market weighed Russia's comments about a possible meeting with Saudi Arabia that renewed hopes for a production freeze deal against a bigger-than-expected U.S. crude inventory build.

Brent futures LCOc1 fell 2 cents to $46.93 a barrel by 12:52 p.m. EST (1752 GMT). U.S. crude CLc1 rose 7 cents, or 0.2 percent, to $45.88 per barrel.

That followed a near 6 percent price surge on Tuesday on news the Organization of the Petroleum Exporting Countries would renew efforts to limit production ahead of its official meeting in Vienna.

Russia said it was ready to support OPEC's decision on an output freeze and sees big chances that the oil producers' group can agree on the terms of the freeze by Nov. 30, Russian Energy Minister Alexander Novak said.

Meanwhile, the U.S. Energy Information Administration said crude stocks increased for a third straight week and rose by a bigger-than-expected 5.3 million barrels last week, topping analysts' 1.5 million-barrel build in a Reuters poll. [EIA/S]

"Fundamentals are weighing on oil prices following the release of the weekly oil inventory report from the U.S," said Abhishek Kumar, senior analyst at Interfax Energy's Global Gas Analytics in London.

"Price volatility will increase as we approach the OPEC meeting scheduled for Nov. 30, but markets will not ignore fundamentals," Kumar said.

Venezuelan President Nicolas Maduro said he will meet with OPEC secretary-general Mohammed Barkindo in Caracas on Wednesday to discuss the freeze.   Continued...

Crude oil drips from a valve at an oil well operated by Venezuela's state oil company PDVSA, in the oil rich Orinoco belt, near Morichal at the state of Monagas April 16, 2015. REUTERS/Carlos Garcia Rawlins/File Photo