Oil rises on supply cut talks, but prices stay down on oversupply concerns

Oil rose on Friday on expectations that OPEC and its allies would agree to cut output next month but prices remained down on the week on concerns that the global market was oversupplied.

Brent was up $1.36 at $67.98 a barrel by 1443 GMT. The global benchmark looked set for a third day of gains since hitting an eight-month low on Tuesday, but was down more than 3 per cent on last week's close.

US light crude was up 98 cents at $57.44 after its steepest one-day loss in more than three years on Tuesday.

Ministers from the Organization of the Petroleum Exporting Countries meet on December 6 in Vienna to decide on production policy for the next six months amid a growing surplus in world markets.

US oil production reached another record last week, at 11.7 million barrels per day, US data showed. The record output helped US crude oil stocks to their biggest weekly build in nearly two years.

The United States imposed sanctions on Iranian oil exports this month and Iranian crude exports have fallen sharply in recent months, although Washington cushioned the blow by granting some temporary exemptions.

Other oil producers have more than compensated for the lost Iranian oil and most analysts now see a significant supply surplus with inventories building, putting pressure on prices.

"The trend is down - stick with it," PVM technical analyst Robin Bieber said.

Fearing a repeat of the 2014 price rout, OPEC is widely expected to start trimming output soon.

This could produce a swift price rebound, some analysts say, especially if production falls further in Venezuela and Libya.

"We are likely from December onwards to have at least 1 million barrels per day (bpd) less of (Iranian) crude exports," Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas, told Reuters Global Oil Forum.

Tchilinguirian said he would not be surprised if Brent recovered to $80 a barrel this year.

OPEC's de facto leader, Saudi Arabia, wants the cartel to cut output by about 1.4 million bpd, around 1.5 percent of global supply, sources told Reuters this week.

The Saudis would like Russia to cut output but Moscow has yet to commit to joint action.

Also supporting prices, Iraq resumed exporting oil from its northern Kirkuk oilfields on Friday, pumping 50,000-100,000 bpd, an Oil Ministry spokesman said. Some analysts had expected the volumes to be much higher, at closer to 300,000 bpd.