Oil is spiking

Oil prices are recovering on Wednesday after worse than expected US oil inventories.

US and UK crude fell back below $50 a barrel in early afternoon trade on Wednesday in London, amid fears that Russia could scupper an OPEC supply cut.

It followed reports of an Interfax story stating Russian is against OPEC oil production cuts, just two days after Russia and Saudi Arabia agreed that something must be done to stabilise the oil market. Russia is a powerful player in OPEC, meaning it could kill the deal. That would leave oversupply as a big problem in the oil market.

It was the second bad news story about the floated oil deal in recent days. Iraq over the weekend joined Iran, Nigeria, and Libya in seeking an exemption to cutting oil output for an OPEC deal, which will be discussed at the group’s meeting in late November.

Oil was down as much as 2% by early afternoon in London. But the price spiked after US oil inventories showed a 55,000 fall in weekly supply, versus analysts expectations of a 2 million increase.

Here is how US crude looks at just after 3.35 p.m. BST (10.35 a.m. ET):

crude

Investing.comAnd here is UK Brent at the same time:

Brent

Investing.com

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See Also:

• Iraq just published rare details on oil production

• Oil's tumbling following reports that Iraq and Iran refuse to freeze output

• RBC: Saudi Arabia must lead by example if OPEC's production cut is to stick

SEE ALSO: OPEC may not be cutting crude oil production after all