Oil climbs 1% on prospect of OPEC, Russia supply cut

Sixth Weekly Loss for Crude Accompanied by Signals of Deepening Bear Market

Hussein Sayed, chief market strategist at futures brokerage FXTM said USA 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".

Oil fell on Monday, surrendering earlier gains as investors weighed up the effectiveness of a potential cut in supply from OPEC and possibly other exporters in the face of rapidly rising global output. USA futures were up 15 cents to $56.61, after dropping as low as $55.08, near last week's one-year low.

One analyst who believes the answer is yes is Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas: he said that if production falls further in Venezuela and Libya, and given "We are likely from December onward to have at least 1 million barrels per day [bpd] less of [Iranian] crude exports", he would not be surprised if Brent recovered to $80 this year.

The market is less sure that a move is coming in December after Russian energy minister Novak said they need to watch the market in the weeks ahead before making any decisions.

The broader cooperation is seen as an evolution to the current production cut deal.

Financial traders have become wary of oil markets, seeing further price downside risks from the soaring USA shale production as well as a deteriorating economic outlook. "It is not unreasonable to anticipate stable prices until then", Tamas Varga, PVM Oil Associates strategist, said.

Front-month Brent crude oil futures, the worldwide benchmark for oil prices, were trading at $67.29 per barrel at 0045 GMT, up 53 cents, or 0.8 percent, from their last close.

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Front-month Brent crude oil futures were at $66.75 a barrel, down 4 cents from their last close.

Despite that, market sentiment remains weak on signs of a demand slowdown amid deep trade disputes between the world's two biggest economies, the United States and China.

A USA decision to grant waivers to some of Iran's oil customers, who faced the prospect of a drop-off in supply from sanctions that came into force in early November, has also helped soothe concern about availability of crude.

Russia's President Vladimir Putin said last week that "it is obvious that we should cooperate and we will cooperate" with OPEC, but refrained from commenting on whether there is need to reduce oil production.

The speculator group cut its combined futures and options positions on USA and Brent crude during the week ended November 13 to the lowest since June 27, 2017.

Weekly exchange data shows money managers hold a combined net long position equivalent to around 364 million barrels of U.S. and Brent crude futures and options, down from over 800 million barrels two months ago.

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