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Oil business from steep sales like OPEC partners discusses supply cuts

NEW YORK (Reuters) – The oil grew by about 2 percent on Wednesday and recovers some of the previous sales outlet, on the growing prospect of OPEC and allied producers who cut production at a meeting next month to tighten the market .

PHILPHOTO: Oil extracts from a spout from Edwin Drake's original 1[ads1]859 well which launched the modern petroleum industry at Drake Well Museum and Park in Titusville, Pennsylvania, USA, October 5, 2017. REUTERS / Brendan McDermid / File Photo [19659003] Prices reclaimed, with Brent inching back over $ 67 after Reuters reported that OPEC and its partners discussed a proposal to reduce production by up to 1.4 million barrels per day (bpd), a larger figure than officials had mentioned earlier.

Burned raw LCOc1 futures rose $ 1.36 to $ 66.83 per barrel, a 2.1 percent gain at 11:35 AM EST (1635 GMT). WTI raw CLc1 futures for December delivery rose $ 1.14 to $ 56.83 per barrel, a 2.1 percent gain.

The price of Brent has fallen by more than 20 percent since the beginning of October with concern for excess supply and reduced demand, one of the biggest downsides since a fall in prices in 2014. US commodity had fallen for a record 12 consecutive cessions to the lowest November 2017.

"The market has cranked in recent weeks, and the pop today is related to the talk that producers could cut up to 1.4 million bpd in 2019," said Gene McGillian, Vice President of Market Research for Tradition Energy in Stamford, Connecticut.

"Perhaps some of the fear of additional supplies and reduced demand has finally been priced to the market, but I do not want to say that a bottom has yet been installed."

Sales until Wednesday were further deteriorated as traders deviate from long oil-short natural gas trading, market participants said. As oil crashed from the high pipe in October, natural gas futures NGc1 increased as much as 56 percent during that time to a 4-1 / 2 year high.

In addition, financial companies say that the risk of selling sales options to oil producers, which gives extra downward pressure when prices fall against option attacks, Goldman Sachs said in a note.

Oil markets are squeezed from two sides: an increase in supply from OPEC, Russia, United States and other manufacturers; and increasing concerns about a global economic downturn.

"This market strives to find a price base after an unprecedented 12 consecutive days of decline," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

"Although the surplus is still relatively modest, the market focuses on expansion dynamics in the overhang which must show signs of reversal before a price base can be established."

In its monthly report, the Paris-based International Energy Agency (IEA) said that the implied stockbuilding for the first half of 2019 is 2 million bpd.

The IEA left the forecast for global demand growth in 2018 and 2019, unchanged from 1.3 million barrels per day (bpd) and 1.4 million bpd respectively, but reduced the forecast for non-OECD demand growth, the engine for expansion in the world's oil consumption.

US .. Crude oil production from its seven major slate bases is expected to hit record 7.94 million barrels per day (bpd) in December, the US Department of Energy Energy Information Administration (EIA) said Tuesday.

This increase in land-based production has helped total US crude production C-OUT-T-EIA hits record 11.6 million bpd, making the United States the world's largest oil producer in front of Russia and Saudi Arabia.

Most analysts expect US production to climb over 12 million bpd in the first half of 2019.

The increase in US production contributes to higher stocks. Official storage data is on Thursday from the EIA, with analysts expecting an increase of 3 million barrels in raw materials storage.

Further reporting by Alex Lawler, Ahmad Ghaddar, Amanda Cooper and Henning Gloystein; Edited by Jason Neely, Alexandra Hudson, Kirsten Donovan and Will Dunham

Our Standards: Thomson Reuters Trust Principles.

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