Oil prices slipped on Wednesday as doubts set in about Russia’s willingness to substantially extend a deal to curb output between some of the world’s biggest exporters aimed at tackling global oversupply and bolstering prices.
Oil falls on uncertainty over OPEC deal, rise in U.S. inventories – Oil prices slipped on Wednesday as doubts set in about Russia’s willingness to substantially extend a deal to curb output between some of the world’s biggest exporters aimed at tackling global oversupply and bolstering prices. Oil prices have rallied by 40 percent since the middle of the year, supported by a deal between the Organization of the Petroleum Exporting Countries (OPEC) and other major exporters, such as Russia, to reduce crude oil production by 1.8 million barrels per day (bpd). The deal expires in March 2018 but is widely expected to be extended at OPEC’s next meeting on Nov. 30. But the length of the extension remains an open question and this has kept the market on its toes. “Tomorrow’s long-awaited meeting was meant to be a formality… This narrative has however not gone according to the script,” said Stephen Brennock, analyst at broker PVM. While the group is expected to extend supply cuts to the end of 2018, it is likely to include an option to review the deal in June, OPEC sources said on Tuesday, after Moscow expressed concerns the market could overheat.
Gold Little Changed as Investors Shrug Off North Korea Missile Launch – Gold prices were largely unchanged on Wednesday, as investors mostly shrugged off North Korea’s latest missile launch, while looking ahead to comments from the head of the Federal Reserve and a batch of U.S. economic data for fresh clues on the likely trajectory of monetary policy. Gold prices notched a minor gain on Tuesday as investors found little in Federal Reserve Governor Jerome Powell’s Senate Banking Committee confirmation hearing to sway expectations for U.S. interest-rate policy. North Korea on Wednesday local time launched a likely intercontinental ballistic missile that landed in the Sea of Japan, according to the Pentagon. The launch, Pyongyang’s first since Sept. 15, came after the U.S. classified North Korea as a country that supported terrorism on Nov. 20. The hermit state later boasted through local media that its new ICBM was capable of reaching the U.S. Despite that, most markets shrugged off the news, with gold failing to draw safe-haven support. Looking ahead, outgoing Federal Reserve Chair Janet Yellen is slated to testify on the economic outlook before the Congressional Joint Economic Committee later in the day, which could provide market participants with an insight into the progress of the economy. Investors are expected to closely parse Yellen’s remarks after she warned that the trend of low inflation limits the potential of further rate hikes.
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