By Riva Gold

Global stocks were on track to end the month higher Wednesday, while oil prices surged on hopes major producers would reach a deal to cut production.

The Stoxx Europe 600 inched up 0.1% late morning and futures pointed to a 0.1% opening gain for the S&P 500 as investors focused on a meeting of the Organization of the Petroleum Exporting Countries.

Oil prices have whipsawed in recent sessions on hopes OPEC would come to an agreement later Wednesday to curb production.

Brent crude oil surged in choppy morning trading, with the February contract last up 6.5% at $50.40 barrel. Prices rose sharply after Iran's oil minister said he believed the cartel would reach a deal, but that an immediate freeze of his country's output wasn't on the agenda.

While the news sent Europe's oil and gas sector up 2%, mining companies posted losses of nearly the same size as metals prices retreated, keeping wider stock-market gains in check,

Steel and iron-ore prices in China had fallen sharply in Asian trading 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 0.7% and 0.5%, respectively.

In government bond markets, the yield on 10-year German government bonds fell to as low as 0.194% from 0.228% 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.

Data Wednesday showed the eurozone's annual rate of inflation rose to its highest since early 2014, but remained well below the ECB's target.

10-year U.S. Treasury yields rose to 2.329% 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 on Tuesday that the case for raising rates had 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%."

Those expectations have also strengthened the dollar, which was last up 0.7% 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.

Wall Street is also on track for its best month since March, with the S&P 500 set to gainnearly 4% in November. Investors have plowed into U.S. bank shares, health care companies, and small-caps on expectations for reduced regulation and higher growth in the U.S.

"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 06:33 ET (11:33 GMT)

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