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Crude oil futures rose around 1% on Tuesday, after Saudi Arabia pledged to work towards oil price stability, while a strong US dollar and an expected rise in US crude stocks limited the price rally.
Benchmark Brent futures for January contract
US crude's West Texas Intermediate (WTI) futures
"The focus is turning to the upcoming OPEC meeting and the hope that some production cuts will be forthcoming. OPEC member comments leading into the December 4 meeting are likely to continue to drive sentiment," ANZ said in a note on Tuesday.
Saudi Arabia led a shift by the Organization of the Petroleum Exporting Countries (OPEC) in November 2014 to defend market share against competing supplies, rather than cut output to prop up prices.
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Saudi's cabinet said on Monday it was ready to cooperate with OPEC and non-OPEC countries to achieve market stability, days before OPEC meets to review its year-long policy of not supporting prices.
On Sunday Venezuelan oil minister said OPEC cannot allow an oil price war and must take action to stabilise the crude market soon. When asked how low oil prices could go in 2016 if OPEC doesn't change its policy, he said: "Mid-20s."
The ANZ note added that the markets are also eyeing any change in US crude oil stocks with the market expecting a small increase.
Regarding US commercial crude oil stocks, a preliminary Reuters survey with five analysts showed on Monday a crude stock build of 1.1 million barrels on average in the week ended November 20, or a rise for a ninth consecutive week.
BNP Paribas said, "We still think that a low 40s NYMEX WTI is a floor from which the market can rally through the winter. Thereafter, the summer of 2016 presents down risk for oil prices as OPEC pursues its current policy, US production stabilises and Iran delivers more barrels to the market."
