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Oil rises as investors anticipate OPEC production cuts

Reuters  |  LONDON 

By Christopher Johnson

LONDON (Reuters) - rose on Tuesday, extending gains ahead of expected output cuts by producer cartel OPEC and a reduction in Canadian supply.

Brent jumped by $1.89 or 3 percent to a high of $63.58 before slipping back to trade around $62.25, up 56 cents by 1425 GMT.

U.S. light crude was last up 20 cents at $53.15 after earlier gaining more than 3 percent to an intraday high of $54.55 a barrel.

Both benchmarks climbed by around 4 percent on Monday after U.S. and Chinese counterpart agreed at a meeting of the Group of 20 industrialised nations (G20) to pause an escalating trade dispute.

"Buying pressures remain at the fore of the as market players keenly await fresh supply curbs," said Stephen Brennock,

The Organization of the Petroleum Exporting Countries meets on Thursday in to agree output policy and will discuss its strategy with producers outside OPEC, including

OPEC and its allies are working towards a deal to reduce output by at least 1.3 million barrels per day (bpd), OPEC sources have told Reuters, adding that they were still talking to about the extent of its production cuts.

However Saudi said it was too soon to be certain that OPEC and other would cut production because the terms of a deal remain unresolved.

Al-Falih said he thought the market was oversupplied but he cautioned that all members of OPEC and its allies needed to come together for a cut to go ahead.

"A cut in OPEC and production of 1.3 bpd will be required to reverse the ongoing counter-seasonally large increase in inventories," said in a note.

It added that it expected a joint effort by OPEC and Russia to withhold supply to push Brent "above the mid-$60 per barrel level".

Helping OPEC in its efforts to rein in emerging oversupply was an order on Sunday by the Canadian province of for producers to scale back output by 325,000 bpd until excess crude in storage is reduced.

OPEC's biggest problem is surging production in the United States, where output - mostly from its southern shale fields - has grown by about 2 million bpd within a year to more than 11.5 million bpd.

said in a note to clients that in alone "reached 4.69 million bpd in September, compared with Iraqi output of 4.66 million by our estimates".

is OPEC's second-biggest behind

(Reporting by in London and Henning Gloystein in Singapore; Editing by and Kirsten Donovan)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, December 04 2018. 20:01 IST
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