Oil price up 2%, but the biggest monthly drop in 10 years is expected – Business News

NEW YORK: Oil reversed its trend and climbed 2% Thursday, after industry sources said Russia had agreed to cut production, in concert with OPEC before his meeting next week.

In November, prices had fallen by almost 22%, due to the largest monthly decline since the depths of the 2008 financial crisis.

The steady increase in the supply of US crude, which is today the world's largest producer, has put pressure on prices, as Saudi Arabia has insisted so that the country does not reduce its own production in order to stabilize the market. Brent crude slid early to another low in 2018 below $ 58 a barrel.

Prices rebounded after sources said Russia would consider joining in a production-cutting effort alongside Saudi Arabia and other members of the organization oil exporting countries.

The Russian Ministry of Energy met on Tuesday with leaders of the country's oil producers, ahead of a meeting in Vienna of OPEC and its allies on December 6 and 7.

"The idea at the meeting was that Russia had to reduce.The key question is how long and how fast," said a source close to the talks between Russian oil companies and the ministry.

The market is now expecting a reduction of 1 million barrels a day from OPEC and its allies, said John Kilduff, a partner at Again Capital in New York.

Brent futures rose 75 cents, or 1.3 percent, to $ 59.51 a barrel, after peaking at $ 60.37 per barrel. US futures were up $ 1.16, or 2.3%, to $ 51.45 a barrel, peaking at $ 52.20.

Oil retreated after peaking after the US Federal Reserve published minutes of the latest political meeting stating that interest rate hikes are expected soon. The dollar index has risen slightly against a basket of currencies, putting pressure on oil prices denominated in dollars.

Russian President Vladimir Putin, whose country is the world's second largest oil producer, said on Wednesday that he was in contact with OPEC and ready to continue cooperation on supply if necessary, but was satisfied with the price of oil at $ 60.

US crude stocks reached their highest level in a year and are now only 80 million barrels below the record high of 535 million barrels in March 2017, according to the Energy Information Administration. [EIA/S]

US stocks are expected to recover over the past week, traders said, citing data from the Genscape Energy Information Service. Crude stocks in central Cushing, Oklahoma have risen 771,924 barrels since Nov. 23, traders said Thursday, citing a weekly report from Genscape.

The US oil reserves in 2017 surpassed their 47-year record by increasing 6.4 billion barrels, or 19.5%, to 39.2 billion barrels, the government announced.

Investors are preparing for the meeting of leaders of the Group of 20 nations (G20), the largest economies in the world, on November 30 and December 1, as part of the trade war between the United States and China.

"We have seen huge increases in supply and demand situation is in question.However, we could witness an evolution of global trade issues at the G20 summit which will begin on Friday," said Michael McCarthy, chief strategist at CMC Markets and Stockbroking.

Anticipating the meeting could also result in higher prices, said Kilduff of Again Capital, adding that traders feared to be short-term of the meeting. – Reuters