Oil at US$50: Who will benefit?

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Fearing tightness in oil markets ahead of the November deadline for U.S. sanctions against Iran, oil prices surged to a four-year high of United States dollars 86.74 a barrel on October 3.

"But market confidence needs to be restored for oil price...that includes an equity market rebound and/or a bigger production cut from major oil exporters", Yang said, referring to an Opec-led agreement to lower output starting next month. Thus, on the New York Trade Exchange, US crude oil fell by more than $ 3 or almost 7 percent to $ 42 a barrel, which was the lowest price since last June.

OPEC is said to deepen output cuts.

Officials from Iraq, Kuwait and the United Arab Emirates agreed with Saudi Arabia's expectation that the group, along with Russian Federation and other oil producers, will extend the agreement for another six months. However, the market seems to be ignoring this move as oil prices are continuously falling in the worldwide market despite this production cut. The chance of an extraordinary meeting by OPEC and its allies is "sending a signal to the market that they will do whatever it takes".

"The demand outlook continues to be called into question".

Futures in NY rose 8.7 percent on Wednesday, the biggest increase since November 2016, amid thin post-holiday trading volume.

Broader financial markets have been under pressure on worries about a global economic slowdown amid higher US interest rates and the U.S.

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In wider financial markets, investors were still anxious as the S&P 500 Index of equities stands just seven points away from completing a full-blown bear market drop.

"I think there is a little bit of over-extension to the downside linked to global market fears", said Olivier Jakob, analyst at Petromatrix.

"There are several bearish factors in oil markets, and the situation won't improve anytime soon".

Physical prices for Brent have also fallen in the last six weeks, driven by a drop in demand from Chinese refiners in particular, which has weighed on the value of barrels of anything from the North Sea to Nigerian crude.

West Texas Intermediate crude for February delivery climbed $1.51/bbl to $44.04/bbl at 9:50 a.m. on the New York Mercantile Exchange.

Brent for February settlement added $4 to settle at $54.47 a barrel on the London-based ICE Futures Europe exchange after earlier dropping to as low as $49.93, the first time the benchmark has dipped below $50 a barrel since July 2017.

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