Oil up, trade choppy as OPEC makes last-ditch bid to save deal

Mon Nov 28, 2016 3:10pm EST
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By Jessica Resnick-Ault

NEW YORK (Reuters) - Oil prices gained more than 2 percent on Monday in volatile trading after falling as much as 2 percent, recouping losses as the market reacted to the shaky prospect of major producers being able to agree output cuts at a meeting on Wednesday.

U.S. West Texas Intermediate crude futures CLc1 settled up $1.02, or 2.21 percent at $47.08 a barrel. Brent crude LCOc1 rose $1.00, or 2.12 percent, to $48.24 a barrel.

In post-settlement trading, oil futures pared gains after Reuters reported that OPEC experts did not agree on the details of a deal to cut output.

Trading was choppy after prices tumbled more than 3 percent on Friday as doubts grew over whether the Organization of the Petroleum Exporting Countries would reach agreement to help curb a global supply overhang that has more than halved prices since 2014.

"Through Wednesday, trade will be very headline-driven," said Tony Headrick of CHS Hedging. "Comments coming out of pre-meetings, particularly from Iraq this morning, are really a driver today."

Market watchers expected prices to remain volatile until OPEC's Wednesday meeting offers the market a definitive answer as to whether OPEC and non-OPEC producers can agree on cuts.

"You're going to see a flattening out of positions closer to Wednesday," said Gene McGillian at Tradition Energy in Stamford, Connecticut. Traders with long positions in the market may be reluctant to sell for fear of missing out on an upside if there is a production cut that triggers a rally.

After a cut is announced, sellers could emerge as oil rallies toward $52 a barrel, he said. "You don't fade at 47 or 45, because you're risking a loss on momentum if they do have an agreement."   Continued...

An employee holds a gas pump at a petrol station in Sao Paulo, Brazil, November 8, 2016.   REUTERS/Paulo Whitaker/File Photo