Oil rises on expected OPEC cuts, but markets remain cautious
SINGAPORE (Reuters) – Oil prices rose on Monday when traders expected top exporter Saudi Arabia to push OPEC producer club to reduce supply by the end of the year.
A rainbow is seen over a pumpkin during sunset outside Scheibenhard, near Strasbourg, France, October 6, 201[ads1]7. REUTERS / Christian Hartmann
Despite this, the market sentiment remains weak in terms of demand demand for deep trade disputes between the world's two largest economies, the US and China.
Future Brent Crude Oil Futures LCOc1, the international reference price for oil prices, traded at $ 67.29 a barrel at 0045 GMT, up 53 cents, or 0.8 percent, from their last closing.
US West Texas Intermediate (WTI) crude futures CLc1, up 61 cents, or 1.1 percent, at $ 57.07 per barrel.
"The market's bullish radar is still awaiting OPEC + to deliver a significant cut number," said Stephen Innes, Asia Pacific's Asia Pacific manager for futures brokerage Oanda, Singapore.
The organization of the petroleum exporting countries (OPEC), de facto led by Saudi Arabia, is pushing for the manufacturer's cartel and its allies to cut 1 million to 1.4 million barrels per day (bpd) of supply to adjust for a decline in demand growth and prevent overuse.
In spite of Monday's gains, commodity prices remain almost a quarter during the last peaks in early October, offset by rising supply and weak demand growth.
On the demand side, Japan's October imports of crude oil – which is the world's fourth largest, but in structural decline due to falling population and better energy efficiency – fell 7.7 percent from the same month last year to 2.77 million barrels per day (bpd), the Ministry of Finance stated on Monday.
This comes as supply in the US is increasing.
U.S.. Energy companies add two oil giants in the week to 16 November, bringing a total of 888, highest levels since March 2015, a weekly report from the energy service Baker Hughes said on Friday.
The increasing drilling activity points to a further increase in US crude oil production C-OUT-T-EIA, which has already sprung by almost a quarter of this year, to a record of 11.7 million bpd.
Demand for supply and demand decline, financial markets have become increasingly cautious in the oil sector, with money managers cutting their bullish bets on raw futures and alternatives to the lowest level since June 2017, the US Commodity Futures Trading Commission (CFTC) said Friday .
The speculative group cut its combined futures and option positions on US and Brent raw during the week ending November 13th to lowest since June 27, 2017.
Reporting by Henning Gloystein; Editing Joseph Radford
