Azernews.Az

By Nigar Abbasova

Crude prices edged up on November 3 amid news of an attack on a Nigerian pipeline and a weaker U.S. dollar.

International benchmark Brent crude futures were 0.7 percent up and traded at $47.19, while WTI crude stood at $45.62 per barrel recording an increase of 0.6 percent.

The price of OPEC basket of fourteen crudes hit $43.12 a barrel on November 3, compared with $44.53 the previous day. The price of a barrel of Azeri Light crude oil decreased by $1.56 to stand at $46.58.

The increase in prices was triggered by concerns about supply disruptions after militants in Nigeria's southern Niger Delta oil hub attacked a pipeline operated by the Nigerian National Petroleum Corporation.

A weaker dollar also buoyed prices by making dollar-denominated oil less costly for the importer countries.

The USD is considered to be one of the biggest factors that determine the oil price, as oil contracts are settled in this currency.

The US Federal Reserve System (FRS), which performs a role of the national central bank in the USA, kept the base interest rate unchanged, maintaining the low level, they have been at since December 2015. FRS opted to keep rates between 0.25 percent and 0.5 percent, which became the seventh consecutive decision, in which Federal Oil Market Committee (FOMC) left the rates unchanged.

However, price volatility in energy markets is still high due to a number of non-supportive signs, including skepticism about proposed oil cuts and increase in U.S. stockpiles.

Stocks of oil in the USA reached a record amount last week, soaring by more than 14 million barrels. The increase became the largest weekly rise since the U.S. Energy Information Administration started keeping records in 1982. U.S. crude imports jumped by about 2 million barrels per day to just under 9 million bpd, the highest rate since September 2012.

Meanwhile, OPEC will meet on November 30 to agree a production cut following almost two-year domination of global oversupply and low prices that deteriorated situation in the market drastically.

OPEC producers earlier agreed to cut down the oil output to 32.5 million barrels per day (bpd) from current production of 33.24 million bpd. The deal is expected to be finalized during the next meeting of the 14-member cartel.

Many market watchers are skeptical that a concrete deal can be reached as the deal faces a number of uncertainties and hindrances. The next OPEC meeting is facing a number of same challenges as in the last meeting, namely disagreement on the path forward

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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