WTI jumps 1% on North Sea outage, OPEC cuts expectations

• Expectations of OPEC output cuts, North Sea outage offer reprieve to oil prices.
• Buts gains appear capped amid a broadly stronger US dollar, as US-China trade woes spar safe-haven buying interest.

Oil prices on both sides of the Atlantic bounced 1% on Wednesday, as the bulls found some respite from fresh supply disruption threats on reports that Britain’s largest North Sea oilfield is shut down for repairs.

Reuters reported trade sources, as saying that the Buzzard oilfield, which pumps about 150,000 barrels per day (bpd) has closed temporarily after the discovery of pipe corrosion, which caused the cancelation of three cargoes due to be loaded next month.

Moreover, it’s widely expected that the OPEC and non-OPEC producers will agree to reduce oil output further when they meet at their annual meeting in Vienna on December 6^th. Hence, the barrel of WTI manages to find some support from the renewed hopes of OPEC output cuts that could help counter the emerging supply overhang worries.

However, it remains to be seen If the black gold can sustain the bounce amid escalating trade tensions between the US and China, which keep the demand for the safe-haven US dollar underpinned. This, in turn, could weigh down on the USD-sensitive oil.

Also, the US GDP and Fed Chair Powell’s speech are likely to have a significant impact on the dollar trades, as markets brace for the US EIA weekly crude stockpiles data due at 1530 GMT.

At the press time, WTI rises 1% to 52.05 while Brent trades just shy of the 61 handle, up +0.86% on the day.

WTI Technical Levels