Oil rebounded amid a broader market rally ahead of the U.S. election as an earthquake struck Oklahoma Sunday near the nation’s largest crude-storage hub.
Futures rose as much as 2.1 percent in New York as equities climbed after the Federal Bureau of Investigation said it maintains the view that Hillary Clinton’s handling of her e-mails wasn’t a crime. A magnitude 5 earthquake struck near Cushing, prompting some pipeline operators to shut operations at the site as a precaution. Russia, the world’s biggest energy producer, is “on board” with an OPEC agreement to limit crude oil production to help re-balance the market, according to OPEC Secretary General Mohammed Barkindo.
Oil has retreated below $45 a barrel following the failure of the Organization of Petroleum Exporting Countries to agree on output quotas for member countries on Oct. 28, which must happen before a deal can be finalized. OPEC pumped at a record rate in October, according to data compiled by Bloomberg. Asian equities and U.S. stock index futures gained ahead of Tuesday’s U.S. election.
“We would be nervous being short from these levels ahead of the meeting” of OPEC nations on Nov. 30, Adam Longson, commodity analyst at Morgan Stanley, said in a report. “OPEC can still spook markets with its rhetoric. If prices continue to slip, the chances for bullish OPEC headlines grow.”
West Texas Intermediate for December delivery rose as much as 92 cents to $44.99 a barrel on the New York Mercantile Exchange, and was at $44.77 at 10:25 a.m. in London. The contract slid 59 cents to $44.07 on Friday. Total volume traded was about 14 percent above the 100-day average. Prices slipped 9.5 percent last week, the most since the period ending Jan. 15.
Brent for January settlement rose as much as 80 cents, or 1.8 percent, to $46.38 a barrel on the London-based ICE Futures Europe exchange. Prices declined 8.3 percent last week, the most since January. The global benchmark traded at an 79-cent premium to January WTI.
The tremor occurred 2 kilometers west of Cushing at a depth of 5 kilometers, the U.S. Geological Survey said on its website. Magellan Midstream Partners LP, a pipeline operator, is working through a controlled shutdown in the area, spokesman Bruce Heine said in an e-mailed statement. There was no damage to its assets and the company expects to resume operations on Monday, he said.
The OPEC technical committee that met last month proposed that the deal to cut output extend for one year starting in January, to be reviewed after six months, state-run news agency APS reported, citing Algerian Energy Minister Noureddine Boutarfa.
Saudi Arabia didn’t threaten to increase its oil production if other OPEC members wouldn’t agree to make cuts, OPEC Secretary-General Mohammed Barkindo said Friday.
Colonial Pipeline Co. restarted the largest U.S. gasoline line Sunday, six days after an explosion and fire in Alabama during planned work.