London: Global oil prices rebounded as traders eyed next week's crucial OPEC output meeting and digested key US stockpiles data. Brent North Sea crude for delivery in January rose 82 cents to USD 79.29 a barrel in late afternoon deals in London. US benchmark West Texas Intermediate for December added 55 cents to USD 75.16 per barrel.
The looming Organization of Petroleum Exporting Countries (OPEC) oil meeting continues to dominate market sentiment. "Oil prices saw a technical rebound off their lows with not much further impetus for selling before next week's OPEC meeting," said CMC Markets analyst Jasper Lawler.
Crude futures had fallen Tuesday on scepticism that an OPEC meeting, due in Vienna on November 27, will result in action to address mounting supplies. Dealers predicted that leading producer Saudi Arabia would resist pressure from other OPEC members to cut output in order to prop up falling prices. Prices sank to four-year lows last week following remarks by OPEC ministers that it is unlikely to slash output at its gathering.
Despite a drop of more than 25 per cent in prices since June, the 12-nation cartel has been divided on whether to reduce output and prevent further falls. Venezuela and Ecuador have called publicly for a cut, while Iran has hinted at a need to reduce output as oil producing countries see their incomes slide. But Saudi Arabia, OPEC's de facto leader and the world's top producer, has been resisting calls for an output reduction, moving instead to slash prices on crude exports to maintain market share.
OPEC pumps about a third of global crude and is currently producing just under 31 million barrels per day, around one million more than its ceiling. Meanwhile today, the US government's Department of Energy (DoE) revealed that American commercial crude inventories rebounded by 2.6 million barrels in the week ending November 14.
That confounded market expectations for a drop of one million barrels, according to analysts polled by Dow Jones Newswires, and signalled weaker-than-expected demand.
