By Jenny W. Hsu
Crude oil prices clawed back losses in Asia trade Tuesday, driven by bargain-hunting, but market participants were mostly downbeat as the prospect of a production cut by major oil-producing nations remains dim.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $46.95 a barrel at 0314 GMT, up $0.09 in the Globex electronic session. January Brent crude on London's ICE Futures exchange rose $0.28 to $48.89 a barrel.
Oil prices are struggling to return to more than $50 a barrel, as investors don't expect the Organization of the Petroleum Exporting Countries and their non-member peers to reach an accord by the end of this month to scale back production.
Market participants have mostly priced in a "no-deal" outcome from the meeting on Nov. 30, the date set by OPEC officials for the ratification of an accord to cut the group's production by 200,000 to 700,000 barrels a day.
Skepticism over the success of the deal intensified after the technical meeting in Vienna over the weekend ended inconclusively as producers weren't able to resolve their differences on current production levels, said ANZ Research.
More OPEC producers are also lobbying to be exempt from the deal. Iraq has reiterated it shouldn't be required to curtail its output because it needs the oil revenue to fund its war against the Islamic State. Venezuela, which is grappling with a severe recession, says it should be excused from this round. Most market participants don't expect Iran, Libya and Nigeria to be bound by the terms of the deal, as their production in the past few years have been stunted by sanctions and militant attacks.
Adding to concerns is the lack of clear commitment from Russia, which has been producing crude oil at a record-breaking pace.
"So OPEC have until the end of November to hammer out the finer details of the deal, and the market so far is skeptical of what can really be achieved. And yet, to a certain extent, the announcement has already achieved its purpose," Singapore Exchange said in a report.
The exchange said that since announcement in late September, Brent averaged more than $50 a barrel in October and WTI prices have hovered around $50 a barrel.
"For OPEC, they have tested the water and found that they still carry some power," the exchange said.
In the near term, the market will be watching the weekly production and inventory data from the U.S. Analysts surveyed by S&P Global Platts estimate U.S. crude stocks rose 1.9 million barrels in the week ended Oct. 28. Official data from the Energy Information Administration is due Wednesday.
Nymex reformulated gasoline blendstock for December--the benchmark gasoline contract--rose 1508 points to $1.5703 a gallon, while December diesel traded at $1.5588, 549 points higher.
ICE gasoil for November changed hands at $446.25 a metric ton, up $6.00 from Monday's settlement.
Write to Jenny W. Hsu at firstname.lastname@example.org
(END) Dow Jones Newswires
October 31, 2016 23:50 ET (03:50 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.