Goldman Sachs warns that Opec meeting in Doha will not deliver a “bullish surprise” for oil prices
Last week oil prices suffered their sharpest weekly decline since January. Reuters

Oil prices rebounded on Monday (7 November), after Opec reiterated its commitment to deliver its promised production cut.

At 9.40am GMT, the West Texas Intermediate (WTI) front month futures contract was up 1.74% or to $44.85 per barrel, while Brent was 1.41% higher at $46.23 per barrel.

Crude prices suffered sharp losses last week, with Brent touching $45.08, its weakest level since 11 August, while WTI hit $43.57 the lowest since 20 September. Last week's losses were the sharpest weekly decline oil prices have suffered since January and wiped out approximately 15% off the 12-month high crude prices touched early in October.

However, a statement from Opec's secretary general Mohammed Barkindo, who said the oil production cartel was committed to implement a deal signed in September to cut output in a bid to prop up the market, seem to breathe new life into crude prices.

"We as Opec remain committed to the Algiers accord that we [...] put together," he told reporters in Abu-Dhabi. "All [of] Opec 14 [countries] remain committed to the implementation."

However, analysts warned optimism over the fate of Opec's agreement appeared to be misplaced and premature. "Individual country details still remain challenging to agree upon," said analysts at Barclays. "Iraq boosted production while Saudi Arabia asked for exceptions. Russia is still sitting on the sidelines, and none of the non-Opec members consulted thus far has expressed any intention of a cut."

FXTM chief market analyst, Jameel Ahmad, said the ongoing impasse over the production deal was not only damaging for oil prices, but it also threatened Opec's credibility.

"Investors have now taken all profits off the table when it comes to oil, and the credibility of the Opec Committee is being called into question as a result of the ongoing lack of clarity over whether there will be a change in production output this month," he said.

Away from oil markets, gold futures tumbled over 1%, as haven assets were under pressure after the FBI said it found no evidence of criminality in a new batch of Hillary Clinton emails, boosting her campaign days before the US presidential election.

At 10.10am GMT, the Comex gold future contract for December delivery $19.20, or 1.47%, to $1,285.30 an ounce. Last week, gold prices rose 2.2% as global markets grew increasingly concerned Donald Trump could succeed Barack Obama at the White House. Clinton is generally viewed as the safer options by investors, while a win for Trump is seen as a positive for gold, given it could lead to volatility and, potentially, put the next interest rate hike by the Federal Reserve on hold.