Commodities: Crude futures surge on Opec cap hopes amid volatility expectations

Crude oil futures are on the front foot on Monday afternoon as traders continue to ponder the likelihood of whether cartel Opec will introduce a production cap when it meets on 30 November in Vienna.

"Just as everyone in the market feared, there is intense volatility in oil prices ahead of this week’s OPEC meeting," said Neil Wilson of ETX Capital.

"No one knows if an agreement to freeze output is just wishful thinking or pretty nearly a done deal," he added.

At about 15:23 GMT, Nymex-quoted West Texas Intermediate crude was up 2.21% to $47.08 a barrel, while Intercontinental Exchange-listed Brent was up 2.12% to $48.24 a barrel.

Connor Campbell, financial analyst at Spreadex, noted Brent crude's rise above $48 a barrel.

"The inspiration ... were comments from the Iraqi oil minister Jabar Ali al-Luaibi claiming he is 'optimistic' for a deal on Wednesday," Campbell added.

Wilson of ETX Capital continued: "This is only the start -- expect many more gyrations as markets react to various rumours and mutterings from Vienna.

"It looks like it will be a bumpy ride for oil until we know the score."

He added that if Opec struck a production cap, crude futures were likely to make a concerted effort to bust $52 a barrel, but a no-deal situation could see $40 tested to the downside.

"A fudged half-deal could leave the market guessing for months to come and oil will be stuck in the range it’s been in since the summer.

"This could be the most likely outcome - the fact is that because of the US shale revolution, OPEC doesn’t have the muscle to really swing prices like it used to."

Meantime, on Comex at about 15:23 GMT, gold was up 0.68% to $1189.00 an ounce, silver was up 0.7% to $16.67 an ounce and copper was up 0.8% to 270.30 cents a pound.

In agriculturals, Chicago Board of Trade-listed corn was down 0.42% to 356.75 cents a bushel, while wheat was down 1.01% to 415.25 cents a bushel.

ICE-priced cocoa firmed 0.17% to $2419.00 a MT, and cotton No.2 rose 1.32% to 72.19 cents a pound. Live cattle down 0.16% to 112.03 cents a pound.