Investing.com - Oil futures recovered on Thursday, with West Texas Intermediate prices reclaiming the $40-level as market players looked ahead to Friday's highly-anticipated OPEC meeting in Vienna.
Media reports said that Saudi Arabia, which has so far resisted pressure to waver from its no-cut policy, will propose a supply cut of 1 million barrels per day, as long as other producers like Iran, Iraq and Russia join them.
On the ICE Futures Exchange in London, Brent oil for January delivery climbed 75 cents, or 1.77%, to trade at $43.24 a barrel during European morning hours. A day earlier, prices plunged $1.95, or 4.39%, after hitting an intraday low of $42.43, the weakest level since August 24.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by OPEC last year not to cut production in order to defend market share.
Elsewhere, crude oil for delivery in January on the New York Mercantile Exchange tacked on 53 cents, or 1.31%, to trade at $40.47 a barrel.
On Wednesday, Nymex futures fell to $39.84, a level not seen since August 27, before ending down $1.91, or 4.56%, at $39.94, after data showed that oil supplies in the U.S. rose for the 10th consecutive week last week.
The U.S. Energy Information Administration said crude oil inventories increased by 1.2 million barrels last week. Market analysts' expected a crude-stock decline of 471,000 barrels.
Total U.S. crude oil inventories stood at 489.4 million barrels as of last week, remaining near levels not seen for this time of year in at least the last 80 years.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $2.77 a barrel, compared to $2.55 by close of trade on Wednesday.
Besides the OPEC meeting, market players are also awaiting the outcome of Thursday’s European Central Bank meeting amid speculation the central bank could ramp up its monetary stimulus program.
Oil traders will also focus on Friday’s U.S. nonfarm payrolls report for November, the last jobs report before the Federal Reserve decides on interest rates at its December 15-16 meeting.
The dollar was boosted as investors increased their bets that the Fed would start raising rates this month following hawkish comments from Federal Reserve Chair Janet Yellen on Wednesday.