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By Michael Poulson, A/S Global Risk Management

Oil prices are up on oil stocks and preliminary OPEC deal.

Against market expectations, OPEC decided to cut production. Yesterday, OPEC agreed on a preliminary deal to curb oil output to between 32.5 mio. barrels and 33 mio. barrels per day. Current output is around 33.24 mio. barrels per day. The deal will likely be completed around the OPEC meeting on 30 November. Though the amount of barrels which will be cut is not huge, the signal the preliminary deal sends is that OPEC can in fact agree on something after a period where the OPEC members let market forces decide oil price levels. Note though, the organisation members also need to "walk the talk" in order to reach longer-term oil price increases.

The other important oil market event yesterday was the weekly oil inventories from the EIA which showed another surprise draw in crude oil inventories - see details below. It is the fourth week in a row with declines in crude oil stocks. However, gasoline stocks surprisingly increased where a 3.2 mio. barrel-draw was expected. So the report was mixed for oil prices with a bias to the bullish side.

Release: EIA oil data (Consensus)
Crude: -1.882M barrels (2.995M)
Distillates: -1.995M barrels (-0.014M)
Gasoline: 2.027M barrels (0.178M)
Refinery utilization: -1.9%

Turning to economic data, yesterday's U.S. Core Durable Goods came around expectations, -0.4%. Today sees U.S. housing sales and GDP, this morning's German employment data came around expectations. Next major economic data release is the Chinese Manufacturing and Non-Manufacturing PMIs for September (Saturday).

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A/S Global Risk Management is a provider of customised hedging solutions for the management of price risk on fuel expenses. The company has offices in Denmark and Singapore. For further details about its risk management products and services, please call +45 88 38 00 00 or email hedging@global-riskmanagement.com.