Oil steadies as Riyadh pushes for further supply cuts

  • Oil steadies as Riyadh pushes for further supply cuts

Oil steadies as Riyadh pushes for further supply cuts

Oil prices surged on Tuesday in the worldwide markets following speculations that the world's largest producer, Saudi Arabia is pressing for more supply cuts as members of the Organisation of Petroleum Exporting Countries and its allies (OPEC+) converge this week on Vienna, Austria.

West Texas Intermediate for January delivery added 28 cents to $56.24 a barrel on the New York Mercantile Exchange as of 7:40 a.m.in London.

Crude has climbed since early October on signs the US-China are close to a breakthrough on an initial trade deal.

Global benchmark Brent crude was trading at $61.03 per barrel at 0628 GMT on Tuesday for a 0.25% gain after it closed Monday at $60.88 a barrel.

Oil prices gained on Tuesday, as hopes rose for OPEC and its allies to agree deeper output cuts when they meet this week, although gains were limited, amid some analysts' skepticism over the achievement of further reductions.

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

Prices were also supported after Iraq's oil minister said on Sunday that OPEC and allied producers will consider deepening their existing oil output cuts by about 400,000 barrels per day (bpd) to 1.6 million bpd.

US President Donald Trump said that a trade agreement with China might have to wait until after the US presidential election next November, denting hopes of a quick resolution to a dispute that has weighed on the world economy.

The OPEC+ group has coordinated output for three years to balance the market and support prices.

However, Alexander Novak, Russian Energy minister and Vagit Alekperov, chief executive officer, Lukoil are on the backs of OPEC+ seeking for an increase in production for adequate supply in Russia as winter approaches.

The factors behind this view included a large increase in production from legacy non-OPEC projects and a still uncertain outlook for demand growth, it added.

The investment bank said it expects Brent to trade around $60 a barrel in 2020 in the absence of geopolitical shocks.

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

United States crude inventories probably shrank by 1.5 million barrels last week, according to a Bloomberg survey.