Oil climbs on prospect of OPEC cuts despite lingering U.S.-China trade concerns
* OPEC expected to cut supply to prevent glut
* Japan set to restart Iran oil imports in January -sources
* No end to Sino-American trade dispute in sight
* US oil drilling points to more output: https://tmsnrt.rs/2Q97LFW
(Adds comment, graphic; updates prices)
By Henning Gloystein
SINGAPORE, Nov 19 (Reuters) - Oil prices rose by around 1
percent on Monday amid expectations that top exporter Saudi
Arabia will push producer club OPEC to cut supply towards
Front-month Brent crude oil futures were at $67.36
per barrel at 0655 GMT, up 60 cents, or 0.9 percent, from their
U.S. West Texas Intermediate (WTI) crude futures,
were up 71 cents, or 1.3 percent, at $57.17 per barrel.
"Oil prices continued to recover...(as) the market will be
watching closely for the possible impact of a (supply) cut."
said Sukrit Vijayakar, director of Indian energy consultancy
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.
Despite Monday's gains, crude prices remain almost a quarter
below their recent peaks in early October, weighed down by
surging supply and a slowdown in demand growth.
This comes in part after Washington granted Iran's major oil
customers, mostly in Asia, unexpectedly broad exemptions to
sanctions it re-imposed on Tehran in November.
Japanese refiner Fuji Oil is set to resume Iranian crude
purchases after Japan received one of those waivers, industry
sources familiar with the matter said.
Japan had ceased all purchases of Iranian oil prior to
receiving the waiver in early November.
Despite that, markets remained wary amid deep trade disputes
between the world's two biggest economies, the United States and
China, after the pair could not find a solution to their spat at
the Asia-Pacific Economic Cooperation (APEC) last weekend.
Hussein Sayed, chief market strategist at futures brokerage
FXTM said U.S. comments from APEC "suggest that a deal between
President Trump and President Xi is unlikely to see the light
when the leaders meet at the G20 Summit later this month".
MORE DRILLING, MORE OIL
Meanwhile, oil production in the United States is surging.
U.S. energy firms added two oil rigs in the week to Nov. 16,
bringing the total count to 888, the highest level since March
2015, a weekly report by energy services firm Baker Hughes said
The rising drilling activity points to a further increase in
U.S. crude oil production <C-OUT-T-EIA>, which has already
jumped by almost a quarter this year, to a record 11.7 million
Put off by a surge in supply and the slowdown in demand,
financial markets have been becoming increasingly wary of the
oil sector, with money managers cutting their bullish wagers on
crude futures and options to the lowest level since June 2017,
the U.S. Commodity Futures Trading Commission (CFTC) said on
The speculator group cut its combined futures and options
positions on U.S. and Brent crude during the week ended Nov. 13
to the lowest since June 27, 2017.
(Reporting by Henning Gloystein; Editing by Joseph Radford)
First Published: 2018-11-19 02:46:47
Updated 2018-11-19 09:02:36
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