Oil prices rise awaiting OPEC output cut

LONDON - Oil prices rose on Wednesday as OPEC and Russia-led allies prepare to announce a big cut in output.

Stocks markets diverged following Tuesday's surge, on hopes the US Federal Reserve could temper its rate hike campaign.

The pound continued to suffer against the dollar over fears for Britain's recession-threatened economy, losing around one percent. 

The main focus has been the oil market. "There will be a lot of attention on just how big this (oil output) cut is," said AJ Bell investment director Russ Mould.

"Speculation they could be double the volume previously flagged... has been behind the recent surge in crude."

READ | Asia markets extend rally on rate hopes, OPEC in focus

Major oil producers led by Saudi Arabia and Russia were on Wednesday expected to announce a large cut in output to prop up prices despite Western concerns over energy-fuelled inflation.

The 13-nation OPEC cartel and its 10 Russian-led allies are reportedly considering a reduction of up to two million barrels per day at a meeting in Vienna -- the biggest cut since 2020.

In a reminder of the global economic turmoil, the World Trade Organization (WTO) dramatically lowered its global trade forecast for 2023.

"Today the global economy faces multi-prong crises. Monetary tightening is weighing on growth across much of the world," WTO Director-General Ngozi Okonjo-Iweala told reporters in Geneva.

Presenting a revision of their annual trade forecast, WTO economists said they still anticipated global economic growth rising 2.8 percent this year.

Hong Kong stocks soared Wednesday following a public holiday, catching up with the previous day's global rally.

In corporate news, Elon Musk has offered to push through with his buyout of Twitter at the original agreed price.

The world's richest man said in a filing with the Securities and Exchange Commission that he sent Twitter a letter vowing to honour the contract.

The latest twist in the long-running saga came ahead of the high-stakes court battle launched by Twitter in an attempt to hold the Tesla chief to the $44-billion deal he signed in April.