Oil Prices Rebound on OPEC Comments Despite a Rise in U.S. Stockpiles

Crude oil prices rose at midday on Wednesday when Russian Energy Minister Alexander Novak said he sees a good chance that the Organization of Petroleum Exporting Countries (OPEC) will agree to curb production by the end of the month. Prices had fallen earlier in the session after the U.S. Energy Information Administration said that rising stockpiles  put inventories "above the upper limit" for the average seasonal range.

The volatility in oil prices come after a rally on Tuesday based largely on optimism that OPEC will agree to cut production later this month -- a sentiment expressed once again on Wednesday by Russia.

The Saudi Energy Minister Khalid al-Falih is expected to travel to Doha for meetings this week with oil-producing countries, including Russia, sources told Reuters. The OPEC secretary-general Mohammed Barkindo will also travel to member nations this week to discuss the production deal cut ahead of the Nov. 30 meeting in Vienna, Reuters reported.

TheStreet's Jim Cramer noted that it's been clear since Trump's campaign that he supports fossil fuels. Part of his "America First Energy Plan" includes "unleash[ing] America's $50 trillion in untapped shale, oil and natural gas reserves, plus hundreds of years in clean coal reserves." Furthermore, the soon-to-be 45th President of the United States wants to open onshore and offshore leasing on federal lands, eliminate moratorium on coal leasing, and open shale energy deposits. 

While Cramer believes that the drilling of federal lands "really means nothing," he continued to say that the possibility that something could stop or shutdown the drilling or pipeline is lessened under a Trump administration. "That allows people to pay more for the stocks, provided there isn't a collapse in crude," Cramer said.

West Texas Intermediate futures fell 0.92% to $45.39 at 10:30 a.m. ET on Wednesday, while global benchmark Brent crude fell by nearly 0.8% to $46.59.

The EIA said U.S. commercial crude inventories increased 5.3 million barrels for the week ending Nov. 11, pushing inventories to 490.3 million barrels. Crude oil imports increased to 8.4 million barrels per day last week, and over the past month, imports averaged 8 million barrels per day, or 12.6% higher than the same period last year.

Refinery inputs rose by 309,000 barrels per day to 16.1 million barrels per day last week. Refineries operated at 89.2% of their operable capacity last week, the EIA reported.

Gasoline inventories rose by 0.7 million barrels last week, and are also well above the upper limit of the average range. But, gasoline production decreased, averaging approximately 10.2 million barrels per day.

Following the EIA report, U.S. integrated oil majors such as Exxon Mobil (XOM) and Chevron (CVX) were mixed -- XOM shares fell slightly while CVX shares rose.

In September the cartel agreed to curb production output to 32.5 million to 33 million barrels per day, but with two weeks until the Vienna meeting pessimism persists that no deal will actually be finalized or implemented. However, sources familiar with discussions told Reuters Wednesday that a final agreement will be reached as they "don't see any deadlock."

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