Crude oil prices are rallying on Wednesday after reports surfaced in Vienna, Austria of an OPEC deal to cut oil production.
Brent crude is currently up 8.39 percent to $49.91 a barrel and WTI is 8.20 percent higher to $48.38 a barrel on Wednesday due to the positive remarks that have already come out of OPEC’s meeting in Vienna about coordinated efforts to lower crude production levels.
Bloomberg has reported this morning that OPEC has clinched a deal to curtail oil supply and lower a record glut in crude oil.
According to Bloomberg, an unidentified delegate reported unofficially that OPEC will reduce production by 1.2 million barrels a day to 32.5 million a day.
The agreement is likely to include a reduction of approximately 600,000 barrels a day by non-OPEC countries such as Russia.
Opening Remarks At OPEC Meeting
During the opening address on Wednesday to the 171st OPEC meeting in Vienna, Dr. Mohammed Bin Saleh Al-Sada, President of the OPEC Conference said that when the conference met earlier in Algiers on September 28th, there was an agreement by OPEC member countries to approve the ‘Algiers Accord’ with an agreement on a new OPEC-14 production target range.
Dr. Mohammed Bin Saleh Al-Sada said over the past 2 months the Committee has done some “excellent work.”
Dr. Mohammed Bin Saleh Al-Sada explained this year he expects non-OPEC oil supply to contract by 800,000 barrels a day, compared to growth of 1.5 million barrels a day in 2015, followed by a contraction of 200,000 barrels a day in 2017.
“World oil demand is expected to grow at healthy levels of around 1.2 million barrels a day in both 2016 and 2017” he said.
OPEC’s meeting is still underway with a press conference scheduled later in the morning around 11:00 a.m. E.S.T. with an official announcement.
U.S. ADP JOBS REPORT
ADP reported this morning that private sector employment expanded by 216,000 in November, beating the 160,000 consensus estimate from economists at briefing.com.
“Businesses hired aggressively in November and there is little evidence that the uncertainty surrounding the presidential election dampened hiring. In addition, because of the tightening labor market, retailers may be accelerating seasonal hiring to secure an adequate workforce to meet holiday demand, although total expected seasonal hiring may be no higher than last year’s” said Mark Zandi, chief economist of Moody’s Analytics in a released statement.
Yesterday the Commerce Department released their 2nd GDP estimate for Q3 that showed GDP expanded 3.2 percent, beating the 3.0 percent consensus estimate from briefing.com.
Consumer confidence also rose higher than expected in November.