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Brent sticks above $78 a barrel as market waits for OPEC
November 20, 2014 / 3:52 AM / 3 years ago

Brent sticks above $78 a barrel as market waits for OPEC

* OPEC will cut production to 30m bpd target -Libyan official

* China flash PMI factory output contracts in October -HSBC survey

* Market waiting for slew of U.S. economic data on Thursday

By Keith Wallis

SINGAPORE, Nov 20 (Reuters) - Brent crude held above $78 a barrel on Thursday as the market waited for news on possible cuts in oil output ahead of next week’s OPEC meeting and a private survey showed China’s factory output contracting for the first time in six months.

According to Samir Kamal, Libya’s OPEC governor and head of planning at the Libyan oil ministry, ministers from the oil producers’ cartel will agree to scale back production to OPEC’s own target of 30 million barrels a day at the Nov. 27 meeting.

That would result in a cut in output of between 250,000-600,000 barrels a day in an effort to buoy oil prices, which have fallen to a four-year low.

“The market has fallen to a level it is going to park at until it gets anything more definitive about OPEC,” said Ric Spooner, chief market analyst at Sydney’s CMC Markets. “That’s what the market is waiting for.”

Brent rose five cents to $78.15 a barrel as of 0333 GMT after closing 37 cents down in the previous session.

U.S. crude for December delivery fell 5 cents to $74.53 a barrel, after finished down 3 cents on Wednesday.

The factory output survey in China added to signs that the world’s second-largest economy was still losing traction.

The China flash HSBC/Markit manufacturing purchasing managers’ index (PMI) fell to 50.0 from a final reading of 50.4 in October, below the 50.3 reading forecast by analysts.

A reading above 50 indicates expansion, while one below 50 points to contraction on a monthly basis.

“It could be a relief because it’s holding up in the face of a weaker property and construction sector,” Spooner said.

The market was also waiting for a slew of economic data from the United States later on Thursday, including consumer prices for October.

Oil prices fell on Wednesday after the Federal Reserve released minutes of last month’s policy meeting, which revealed concerns U.S. inflation could remain below target for “quite some time”.

U.S. crude stockpiles unexpectedly rose by 2.6 million barrels last week, supported by an increase in oil imports, data from the U.S. Department of Energy’s Energy Information Administration showed on Wednesday. (Reporting By Keith Wallis; Editing by Alan Raybould)

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