Crude Oil Prices Rise as OPEC Plays Down Global Recession Fears

By Adedapo Adesanya 

Oil prices saw a growth on Wednesday following disclosure by the Organization of the Petroleum Exporting Countries (OPEC) that there were no signs of global recession.

Following this, Brent crude traded up by 43 cents or 0.69 percent to settle at $62.49 per barrel, while the US West Texas Intermediate (WTI) crude settled at $57.21 per barrel after gaining 41 cents or 0.72 percent

According to the OPEC Secretary General, Mr Mohammad Barkindo, global economic fundamentals remained strong, adding that he was still confident the United States and China would reach a trade deal.

“It will almost remove that dark cloud that had engulfed the global economy,” Mr Barkindo said, adding it was too early to discuss the output policy of OPEC’s December meeting scheduled for Vienna on 5-6 of next month.

He also said some companies in the United States have projected that oil production would grow by just 0.3 – 0.4 million barrels per day next year or less than half of previous expectations stating that will reduce the risk of an oversupply in 2020.

It was also disclosed that crude rival, US shale oil could experience production growth by much less than expected numbers in 2020.

Prices also got support following comments by Federal Reserve Chair Jerome Powell, who said the United States economy would see a sustained expansion with the full impact of recent interest rate cuts still to be felt.

On the trade deal which had continue to tell on oil prices, Business Post reported on Tuesday that US and China were close to finalizing a trade deal, but didn’t provide much details as to a date or venue for the signing ceremony.

Also, lending support to price gains were expectations of an inventory build as analysts in a Reuters poll forecast crude oil inventories climbed 1.6 million barrels last week, which would be the third weekly increase in a row.

Oil futures are expected to keep pointing north as the American Petroleum Institute (API) is set to release its data for the latest week on Wednesday (yet to release as at press time) , while the weekly report from the U.S. Energy Information Administration (EIA) is due at on Thursday.