Published: Tue, December 03, 2019
Markets | By Otis Pena

Oil prices rise as Saudi Arabia pushes for further supply cuts

Oil prices rise as Saudi Arabia pushes for further supply cuts

American benchmark West Texas Intermediate (WTI) was trading at $56.16 a barrel at the same time for a 0.2% increase after it ended the previous session at $56.03 per barrel.

Oil extended gains as Opec crude output dropped before the group and its allies meet this week to set the path for future production cuts.

Brent for February settlement gained 22 cents, or 0.4 percent, to $61.14 a barrel on the London-based ICE Futures Europe Exchange.

Meanwhile, the latest uptick in oil prices can be attributed to fresh selling seen in the US dollar across its main competitors, as the European traders hit their desks and react negatively to the downbeat US data and US President Trump's USD jawboning.

"I have no deadline, no", Trump told reporters in London, where he was due to attend a meeting of North Atlantic Treaty Organisation leaders.

OPEC oil output fell in November as Angolan production slipped due to maintenance and Saudi Arabia kept a lid on supply to support prices before the initial public offering of state-owned Saudi Aramco, a Reuters survey found.

Russian Energy Minister Alexander Novak on Tuesday said he expected this week's meeting to be constructive but added that Moscow had yet to finalize its position.

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"Already large speculative buying in recent weeks and some expectations for a longer/larger cut suggests that an uneventful three-month extension is unlikely to provide much upside to current prices".

Concerns about the inability of the United States and China, the world's two biggest oil users, to reach a preliminary deal to resolve their 17-month trade dispute also weighed on oil prices, along with discouraging USA economic data.

Also, the bank in anticipation hopes that Brent would sell within the $60 per barrel mark in 2020 irrespective of "absent new growth or geopolitical shocks" that might arise.

OPEC ministers meet in Vienna on Thursday and the broader OPEC+ group gathers on Friday.

The U.S. oil producer companies remained unperturbed due to the continuous increase in production with the hope to meet up with shortfalls as the global oil regulator is due to announce possible cuts in supply this week. Growth into 2020 could range between 100,000 bpd and 1 million bpd.

United States crude inventories are expected to have declined last week, which may support prices, with analysts in a preliminary Reuters poll suggesting a contraction of 1.8 million barrels.

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