Oil rebounds on renewed hopes for an OPEC deal
The price of oil rebounded on Wednesday morning as market hopes were renewed that OPEC will be able to reach a production deal by the end of the day.
As of 8:20 a.m. GMT (3:20 a.m. ET), the price of Brent oil bounced back by nearly 2%, after cratering on Tuesday afternoon:
The price of US West Texas Intermediate crude also followed suit:
Oil prices initially started crashing on Tuesday afternoon after Iran said that it won't participate in any upcoming cut to production. Iran's oil minister Bijan Zanganeh said that the country will leave production at the levels decided at OPEC's meeting in Algeria in September. In short, Iran won't cut its output.
However, on Wednesday morning, Reuters reported that a delegate from the Iraqi contingent said that "there will be an agreement today," while the Iranian Oil Minister Bijan Zanganeh said "I'm optimistic."
The OPEC meeting starts at 9 a.m. GMT (4 a.m. ET).
But not all investors are optimistic. Analysts Mike van Dulken & Henry Croft at Accendo Markets wrote a note to clients this morning saying (emphasis ours):
"Crude Oil prices are rallying (Brent at $48, US approaching $46) on remarks from the Iraqi oil minister that a deal will be reached by OPEC today, however with the cartel's track record, his comments can be taken with a healthy amount of scepticism.
"Prices today rely almost entirely on the outcome of the 10am ministers' meeting (press conf this afternoon) at the group's HQ, with a deal leading to a sharp rally whilst anything else will likely send price per barrel spiralling downwards. It's crunch time in Vienna."