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Oil rises to $73 on report of Russia, Saudi output cut talks

Reuters  |  LONDON 

By Alex Lawler

LONDON (Reuters) - rebounded to $73 a barrel on Wednesday after falling to its lowest since August, supported by a report that and are discussing output cuts in 2019.

Russia's agency, citing an unnamed source, reported that the two countries, the biggest producers in an OPEC-led alliance that has been limiting supply since 2017, have started bilateral talks on the issue.

"I think this is a little bit of verbal intervention, trying to get some speculative length back into the market," said of "The global supply and demand balance does not look very tight next year."

Brent crude, the global benchmark, rose 91 cents to $73.04 a barrel by 1304 GMT. The contract hit $71.18 on Tuesday, its lowest since Aug. 16. U.S. crude rose 58 cents to $62.79.

While Iranian exports are expected to fall because of U.S. sanctions that took effect on Monday, reports from OPEC and other forecasters have indicated that the global market could see a 2019 supply surplus as demand slows.

A ministerial committee of some members and allies, including and Saudi Arabia, is due to meet on Sunday in to discuss the market and outlook for 2019.

Any return to limiting supply would follow a June decision by the OPEC-led group to relax output curbs in place since 2017, after pressure from U.S. to cool prices and make up for losses from

Supply from countries such as has risen sharply since June. In addition, having initially talked of cutting Iranian to zero, gave waivers to eight customers, raising the prospect of more Iranian oil in the market than expected.

Earlier in the session on Wednesday, oil traded lower as rising U.S. inventories and sanction waivers allowing to keep exporting crude reinforced an outlook for ample supplies.

"The market continues to shift from worrying about tightening supplies to acknowledging upside supply risks and weakening demand growth," analysts at wrote in a report.

The American Petroleum Institute, an industry group, said on Tuesday U.S. crude stocks rose by 7.8 million barrels last week, more than analysts had forecast. The government's official supply report is due at 1530 GMT.

(Additional reporting by Henning Gloystein; editing by and Louise Heavens)

(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: Wed, November 07 2018. 18:46 IST