Oil prices climb on OPEC deal, lack of detail caps gains - Sean Seshadri Trading Strategy

Oil futures extended gains on Thursday after rising nearly 6 percent the day before on a surprise move by OPEC to curb crude output.

The Organization of the Petroleum Exporting Countries agreed to limit its production to a range of 32.5-33.0 million barrels per day (bpd) in talks held on the sidelines of an energy conference in Algeria.

But how much each country will produce is to be decided at the next formal OPEC meeting in November, when an invitation to join cuts could also be extended to non-OPEC countries such as Russia.

"The decision really took market by surprise - prices took a big leap, now there's pause for reflection," said Ben Le Brun, markets analyst at Sydney's OptionsXpress.

"An agreement to have an agreement - I don't know where that leaves us," he said.

A drop in U.S. crude stocks for the fourth straight week also supported oil prices.

U.S. West Texas Intermediate (WTI) crude had risen 28 cents to $47.33 a barrel by 0020 GMT, after closing the previous session up $2.38, or 5.3 percent.

Brent crude climbed 31 cents to $49.00 a barrel, having settled up $2.72, or 5.9 percent.

"More cynical traders have pointed out the complete lack of detail, including the potentially problematic question of which nations will curtail production," said Michael McCarthy, chief market strategist at Sydney's CMC Markets.

"A 6-percent jump in crude prices makes a nice headline, but is within normal bounds for the currently highly volatile energy markets. Although this rally may quickly fade, energy stocks are likely to receive a boost at this morning’s opening," McCarthy said.

OPEC will agree to production levels for each member country at its Nov. 30 meeting in Vienna, group officials said.

That came as U.S. crude stocks fell 1.9 million barrels to 502.7 million barrels in the week to Sept. 23, against analyst expectations for a 3 million barrel increase, data from the U.S. Department of Energy's Energy Information Administration showed. [EIA/S]

"U.S. crude oil inventories are at historically high levels for this time of year," EIA said in a statement.

Inventories were expected to rebound after the big drop a few weeks ago, but instead stocks have continued to decline with imports.

While oil prices remained range-bound at between $40-50 a barrel, a push beyond $50 barrel could see "shale oil producers turn the taps back on", said Le Brun at OptionsXpress.

"If this proposed (output) cut is strictly enforced and supports prices, we would expect it to prove self defeating medium term with a large drilling response around the world," Goldman Sachs (NYSE:GS) said in a note.

Oil prices climb on OPEC deal, lack of detail caps gains - Sean Seshadri

Oil futures extended gains on Thursday after rising nearly 6 percent the day before on a surprise move by OPEC to curb crude output.

The Organization of the Petroleum Exporting Countries agreed to limit its production to a range of 32.5-33.0 million barrels per day (bpd) in talks held on the sidelines of an energy conference in Algeria.

But how much each country will produce is to be decided at the next formal OPEC meeting in November, when an invitation to join cuts could also be extended to non-OPEC countries such as Russia.

"The decision really took market by surprise - prices took a big leap, now there's pause for reflection," said Ben Le Brun, markets analyst at Sydney's OptionsXpress.

"An agreement to have an agreement - I don't know where that leaves us," he said.

A drop in U.S. crude stocks for the fourth straight week also supported oil prices.

U.S. West Texas Intermediate (WTI) crude had risen 28 cents to $47.33 a barrel by 0020 GMT, after closing the previous session up $2.38, or 5.3 percent.

Brent crude climbed 31 cents to $49.00 a barrel, having settled up $2.72, or 5.9 percent.

"More cynical traders have pointed out the complete lack of detail, including the potentially problematic question of which nations will curtail production," said Michael McCarthy, chief market strategist at Sydney's CMC Markets.

"A 6-percent jump in crude prices makes a nice headline, but is within normal bounds for the currently highly volatile energy markets. Although this rally may quickly fade, energy stocks are likely to receive a boost at this morning’s opening," McCarthy said.

OPEC will agree to production levels for each member country at its Nov. 30 meeting in Vienna, group officials said.

That came as U.S. crude stocks fell 1.9 million barrels to 502.7 million barrels in the week to Sept. 23, against analyst expectations for a 3 million barrel increase, data from the U.S. Department of Energy's Energy Information Administration showed. [EIA/S]

"U.S. crude oil inventories are at historically high levels for this time of year," EIA said in a statement.

Inventories were expected to rebound after the big drop a few weeks ago, but instead stocks have continued to decline with imports.

While oil prices remained range-bound at between $40-50 a barrel, a push beyond $50 barrel could see "shale oil producers turn the taps back on", said Le Brun at OptionsXpress.

"If this proposed (output) cut is strictly enforced and supports prices, we would expect it to prove self defeating medium term with a large drilling response around the world," Goldman Sachs (NYSE:GS) said in a note.

Sean Seshadri Trading Florida - Gold prices mostly steady in Asia as rates, politics and OPEC mix

Gold prices were mostly steady in early Asia on Wednesday as investors navigated a mix of U.S. interest rate and presidential election views, prospects for an OPEC output freeze and an upbeat U.S. survey on consumer confidence.

Gold for December delivery on the Comex division of the New York Mercantile Exchange inched up 0.01% to $1,330.55 a troy ounce.

Earlier, Federal Reserve Vice Chair Stanley Fischer said Tuesday that the U.S. economy has started to generate better wages, but they need to go higher.

"Finally incomes of working people began to rise faster than incomes of people higher up" on the income scale, Fischer said while answering questions at Howard University after a speech. The former IMF chief economist said his comments were general in nature and when asked about the possibility of a no-interest rate economy said: "I don't like it." But he said the point on rates was not about monetary policy in the U.S.

Also on the radar of the markets, OPEC members, led by Saudi Arabia and other big Middle East crude exporters, such as Iran and Iraq, will meet non-OPEC producer Russia at the International Energy Forum in Algeria on Wednesday at 14:00GMT (10:00AM ET).

Overnight, gold prices were lower during North America's session on Tuesday, extending overnight losses as markets declared Democrat Hillary Clinton as the winner of her first U.S. presidential debate with Republican Donald Trump.

Democrat nominee Hillary Clinton appeared to have edged out her Republican opponent Donald Trump in the first presidential debate, based on analysts' take on the market reaction.

Online betting companies shortened the odds on a Clinton win in the wake of the Monday night debate, leaving her as the clear favorite among bettors.

Traders are mostly expecting Democratic candidate Hillary Clinton to win the presidency and have not factored in the implications of a victory for Donald Trump. The idea of Trump in the White House is a worrying one for some investors who balk at his populist, unpredictable style.

Recent polls have shown a tightening race with just around six weeks to go until the November 8 election. The next presidential debate is scheduled for October 9, with the third and final clash set for October 19.

The precious metal has been well supported in recent days after the Federal Reserve held off on raising interest rates and scaled back the number of rate hikes it expects next year.

Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.

The Fed has policy meetings scheduled in early November and mid-December. Economists believe policymakers would avoid a rate hike in November in part because the meeting falls just days before the U.S. presidential election.

Markets are currently pricing in an 8.3% chance of a rate hike at November's meeting, according to Investing.com's Fed Rate Monitor Tool.

Also of note, U.S. consumer confidence unexpectedly jumped in September to more than a nine-year high boosted optimism over the strength of the economy.

The Conference Board said its consumer confidence index increased to 104.1 this month from a reading of 101.8 in August, whose figure was revised from a previously reported 101.1. That was its highest level since August 2007. Analysts had expected the index to slip to 99.0 in September.

Sean Seshadri Trading Institute - NYMEX crude weaker in early Asia as focus on OPEC, U.S. stockpiles

Crude oil prices dipped in Asia on Tuesday with all eyes on an end-of-the-week OPEC meeting and supply data from the U.S.

Later Tuesday, the American Petroleum Institute will releases estimates of crude and refined product stocks at the end of last week. The figures will be followed by official data on Wednesday from the U.S. Department of Energy.

Crude oil for November delivery on the New York Mercantile Exchange fell 0.46% to $45.72 a barrel.

Overnight, oil prices rallied in volatile trade during North American hours on Monday, amid hopes global oil producers will make progress on a deal to limit production at a meeting later this week.

The 15th International Energy Forum kicked off in Algiers on Monday with all eyes on the informal meeting tentatively scheduled for Wednesday afternoon among members of the Organization of Petroleum Exporting Countries.

OPEC members, led by Saudi Arabia and other big Middle East crude exporters, such as Iran and Iraq, will meet non-OPEC producer Russia on the last day of the conference.

According to market experts, chances that the meeting would yield any action to reduce the global glut appeared minimal. Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.

An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.

On the ICE Futures Exchange in London, Brent oil for December delivery rose 92 cents, or 1.98%, to $47.40 a barrel by 9:35AM ET (13:35GMT).

Market players continued to focus on U.S. drilling prospects, amid indications of a recent recovery in drilling activity. Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 2 to 418, marking the 12th increase in 13 weeks.

Sean Seshadri Trading Florida - Oil prices rebound after Algeria says all options open at OPEC meeting

Crude prices rebounded on Monday after Algeria's energy minister said the day before that all options were possible for an oil output cut or freeze at this week's informal meeting of OPEC producers.

That came after prices tumbled 4 percent on Friday amid signs Saudi Arabia and Iran were making little progress in achieving preliminary agreement to freeze production.

Members of the Organization of the Petroleum Exporting Countries will meet on the sidelines of the International Energy Forum in Algeria from Sept. 26-28, where they will discuss a possible output-limiting deal.

"We will not come out of the meeting empty-handed," Algerian energy minister Noureddine Bouterfa said in Algiers on Sunday.

A weaker U.S. dollar also supported oil prices.

Brent crude futures had climbed 39 cents to $46.28 a barrel as of 0330 GMT after settling down $1.76, or 3.7 percent, at the previous close. The benchmark advanced 0.3 percent last week.

U.S. West Texas Intermediate (WTI) crude futures rose 32 cents to $44.80 a barrel after falling $1.84, or 4 percent, in the previous session. U.S. crude gained 3 percent last week.

"The fact countries like Algeria are still talking about a deal means it's still on the table regardless of others' views about what might be happening," said Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance.

"I expect Algeria and Venezuela to keep pushing for a deal - it's imperative for them to keep the price up," Barratt said.

Signals have been mixed so far on whether a deal on cutting or freezing production is possible.

Sources told Reuters on Friday that Saudi Arabia did not expect a decision to be made in Algeria, while Saudi Arabia had also offered to reduce production if Iran caps its own output this year, an offer to which Tehran had yet to respond.

"Our base case is that OPEC will meet on Sept. 28 without a formal statement. A nonbinding commitment to stabilize oil markets is possible, but it would likely lack teeth,"Morgan Stanley (NYSE:MS) said in a note on Monday.

"Rather, we expect OPEC to note how this meeting lays the foundation for a more constructive and formal discussion at the official November OPEC meeting," the bank added.

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