Markets

Oil prices climb on prospect of OPEC cuts

Oil prices climb on prospect of OPEC cuts

As reported by Interfax, investors continue to assess the likelihood that OPEC+ will take a decision on reduction of oil production at the December meeting in Vienna. Russia, meanwhile, is sowing doubts about whether it will join OPEC in its next round of output cuts.

"Severe one month declines in the price of oil has not presaged market weakness, quite the contrary, actually", Jefferies said in a research note, as carried by CNBC. In early October, the oil traded above $74 a barrel.

Russian Energy Minister Alexander Novak said on Monday that Russia, which is not an OPEC member, planned to sign a partnership agreement with the group, and that details would be discussed at OPEC's December 6 meeting in Vienna.

The unexpected resurgence in Iranian oil imports due to the waivers has helped push spot prices for Middle East crude and condensate to their lowest in more than a year. US crude futures traded 30 cents higher at $56.76 a barrel in a session that saw swings in a $2 per barrel range.

"And with the increasing pressure of geopolitics on oil markets that we are seeing, we believe that we are entering an unprecedented period of uncertainty".

Despite that, market sentiment remains weak on signs of a demand slowdown amid deep trade disputes between the world's two biggest economies, the United States and China.

Oil falls after Russia preaches patience rather than production cuts
Russia plans to sign deal with OPEC

The rising drilling activity points to a further increase in U.S. crude oil production, which has already jumped by nearly a quarter this year, to a record 11.7 million bpd.

The broader cooperation is seen as an evolution to the current production cut deal. Total volume traded was 3% below the 100-day average.

Meanwhile, drillers in the United States added two more working rigs last week, bringing the total to 888, the highest level since March 2015, according to Baker Hughes data. "So far the daily lows from Friday and Thursday of last week have been violated and today's price action is now testing last Wednesday's low of $55.38 per barrel, on the way to testing last Tuesday's bottom of $55.11 per barrel", he said earlier in the day, when prices were lower.

The International Energy Agency (IEA), which represents the interest of oil consumers, on Monday warned OPEC and other producers of the "negative implications" of supply cuts, with many analysts fearing that a spike in crude prices could erode consumption.

Oil tumbled below $54/bbl for the first time in a year amid concern OPEC's plans to cut production won't be enough to stem a surge in stockpiles and a selloff in global equities. 9, according to government data.

The Organization of the Petroleum Exporting Countries (Opec), de-facto led by Saudi Arabia, is pushing for the producer cartel and its allies to cut 1 million to 1.4 million barrels per day (bpd) of supply to adjust for a slowdown in demand growth and prevent oversupply.

North Korea's Kim inspects testing of newly developed 'tactical' weapon - KCNA
Pence made the comments after meeting with South Korean President Moon Jae-in on the sidelines of the ASEAN summit in Singapore . The North Koreans have increasingly called for sanctions relief, while the U.S. has insisted that denuclearization comes first.