Oil prices rebounded this morning after a surge in the US dollar weighed on the black stuff and took Brent crude below $46 and US sweet crude under $45.
Brent crude flat at $46.49 a barrel this morning, lifting from a low of $45.78, as optimism that the Organisation of the Petroleum Exporting Countries (Opec) managed to outweigh pressure from a rallying US dollar.
Expectations of a Federal Reserve interest rate hike caused a surge in the greenback this morning, particularly against the euro. A strong dollar makes oil more expensive to buyers using other currencies, as the major benchmarks are priced in dollars.
West Texas Intermediate was down 0.24 per cent, or 11 cents, at $45.31, regaining from a slip to $44.59 a barrel earlier this morning.
Opec has ramped up diplomatic efforts this week, led by Saudi energy minister Khalid al-Falih, to help secure an output cut that will tackle persistently low prices.
|What is Opec deciding?|
|On 30 November, the 14-member consortium will attempt to hash out a final agreement that finalises the commitments made in the Algiers Accord, reached at the end of September, to tackle the global supply glut that depressing prices.|
|In the provisional agreement, Opec members agreed to cut production to between 32.5m and 33m barrels per day (bpd). The group's level of production in October was 33.64m bpd, meaning it will need to cut production by over 1m bpd if it opts for the lower end of the indicated range.|
Oil prices were buoyed by the Algiers agreement in October, breaking the $50 per barrel mark for much of the month, but massive rises in US crude stockpiles have weighed heavily on the market and kept the price around the $46 mark for much of November.
The chief financial officer of oil group Gulf Keystone Petroleum blasted Opec last month, saying the market was becoming more immune to its announcements.
“Opec for me has lost credibility in every statement they are making at the moment about potential cuts or potential maintenance or caps. We’ve heard it so many times that now the price is not being very sensitive to those declarations,” Sami Zouari said.