Mubasher: Oil prices rose on Monday amid expectations that major exporter Saudi Arabia would push members of the Organization of Petroleum Exporting Countries (OPEC) to withhold supply toward year-end.
However, traders remained cautious amid intense trade disputes between the US and China.
By 7:41 am GMT, US Nymex crude futures jumped 1.35% to $57.22 per barrel (pb), while global benchmark Brent futures rose 1.03% to $67.45 pb.
OPEC’s de-facto leader Saudi Arabia was pushing the producer group and its allies to erase 1 million to 1.4 million barrels per day (bpd) of supply on the back of a slowdown in demand growth, preventing a market glut.
“Oil prices continued to recover [as] the market will be watching closely for the possible impact of a (supply) cut,” Indian energy consultancy Trifecta director Sukrit Vijayakar told Thomson Reuters.
Despite Monday’s gains, oil prices remained almost a quarter below their recent highs in early October, dragged down by soaring supply and slowdown in demand growth.
This came partially after the US granted major Iranian oil buyers, mostly in Asia, broad waivers to the sanctions re-instated on Tehran in November.
Japanese refiner Fuji Oil is expected to continue its crude purchases from Iran, after Tokyo received an exemption from Washington, informed industry sources told Reuters.
Japan already stopped all exports of Iranian crude oil ahead of receiving sanctions waiver in early November.
Oil production in the US is surging, as energy firms added two oil rigs in the week ended 16 November, to a total of 888, the highest level since March 2015, according to Baker Hughes’ weekly report.
This heralded a further increase in US output, which already hit a record of 11.7 million bpd, after jumping by nearly a quarter this year.
Financial markets have been growing cautious about the oil sectors, with fund managers slashing their bullish wagers on oil futures to the lowest level since June 2017, Commodity Futures Trading Commission (CFTC) said on Friday.
CFTC lowered its combined positions on Nymex and Brent crude during the week ended 13 November to the lowest since 27 June, 2017.
