Rate cuts expectations lead to rise in price of oil

Today's session in the oil market was, once again, dominated by external factors.

The prospect of rate cuts in Japan and the US buoyed equities and crude prices followed with a rally - WTI going up to over $66/bbl before retracting slightly to close at $64.40.

Similarly, Brent crude advanced to around $62 and opens this morning around $62.70.

Underpinning the rise are comments suggesting that OPEC may meet again before the scheduled December meeting to address the propsect of further production cuts.

This would appear unlikely given that the recent 1.5 million bpd reduction was to be implemented in November, giving little time for an assessment of the efficacy of the move.

That Friday's action failed to arrest the price decline in crude oil reflects the fact that the focus of markets is very much on the demand side with concentration upon global slowdown rather than supply.

Reported deterioration in the economic picture, in the US and Europe in particular, is set to further undermine attempts to move higher and the release of weekly EIA statistics will probably weigh heavily on prices again.

Consensus is for rises in stocks of crude, distillates and gasoline reflecting continued demand destruction for products.

Todays range for Brent is set to embrace $61.40-$67.

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