By Riva Gold

Global stocks were on track to close out a solid month with gains on Wednesday despite mounting anxiety over commodity prices.

The Stoxx Europe 600 climbed 0.5% midmorning, while futures pointed to a 0.2% opening gain for the S&P 500.

Brent crude oil surged in choppy morning trading and was last up 5.2% at $49.79 a barrel on hopes that a deal by the Organization of the Petroleum Exporting Countries to cut production would be announced later in the day.

Prices rose after Iran's oil minister said that he believed the cartel would reach a production deal, but that an immediate freeze of his country's output wasn't on the agenda.

While the news boosted the oil and gas sector, mining companies posted losses, keeping wider gains in check, as metals prices continued to retreat from a major rally. Copper and aluminum futures in London declined following a selloff by Chinese investors.

Steel and iron-ore prices in China fell sharply on Wednesday after exchanges there lowered the daily trading limit and raised margin requirements in an effort to curb speculation. The recent rally in metal prices was largely driven by Chinese investors on hopes that demand would pick up in China and the U.S., analysts said.

Meanwhile, U.K. bank shares diverged in morning trading after the Bank of England said the financial system had held up well since the June referendum but that the outlook for financial stability remained challenging.

Royal Bank of Scotland Group, Barclays and Standard Chartered all stumbled in the Bank of England's stress test, but the central bank said only RBS needs to act quickly to bolster its capital.

Shares of Royal Bank of Scotland Group PLC fell 4.1%, while Standard Chartered and Barclays were down 0.4% and 0.3% respectively. HSBC Holdings rose slightly following the tests.

In government bond markets, the yield on 10-year German government bonds fell to as low as 0.194% from 0.228% before recovering after European Central Bank President Mario Draghi said officials could decide to change the size of their monthly bond purchases at next week's meeting.

"We can deliver the appropriate [policy] stance by different combinations of instruments, for instance the amount of monthly [bond] purchases or the length of time over which they take place," he said in an interview on the central bank's website.

10-year U.S. Treasury yields rose to 2.332% from 2.305% on Tuesday. While the ECB continues to ease policy, the Federal Reserve is widely expected to raise interest rates at its December meeting.

Federal Reserve Governor Jerome Powell said Tuesday that the case for raising rates has strengthened since the central bank's last meeting, with the economy "growing at a healthy pace, with solid payroll job gains, and inflation gradually moving up to 2%."

The dollar continued to rise Wednesday and was last up 0.8% against the yen and 0.1% against the euro.

Earlier, markets in Asia were mixed, as the steep drop in metals prices offset a higher close on Wall Street.

Japan's Nikkei Stock Average was flat but ended the month over 5% higher than it started, bolstered by a steady strengthening of the dollar against the yen.

The S&P 500 is on track to gain nearly 4% this month, which would mark its best month since March.

"There's still a runway for upside given you still have a lot of positive things going on--you have home prices increasing, consumer net worth increasing dramatically, low unemployment, and signs of wage growth," said Lowell Yura, portfolio manager at BMO Global Asset Management.

"A strong dollar and strong growth could be very positive for U.S. equities," he said.

Biman Mukherji, Margot Patrick, Shayndi Raice and Jenny W. Hsu contributed to this article

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(END) Dow Jones Newswires

November 30, 2016 05:03 ET (10:03 GMT)

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