Oil up 1% at the prospect of OPEC and the reduction of the Russian supply

SINGAPORE (Reuters) – Oil prices rose about 1 percent Monday, while Saudi Arabia, one of the major exporters, will push the producers club, the OPEC as well than maybe Russia, to reduce its supply towards the end of the year.

Brent crude futures in the first month were $ 67.41 per barrel at 07:46 GMT, up 65 cents or 1% from their last close.

WTI futures (West Texas Intermediate) rose 76 cents, or 1.4%, to $ 57.22 a barrel.

"Oil prices have continued to recover … the market will closely monitor the possible consequences of a reduction in supply," said Sukrit Vijayakar, director of India's Trifecta Energy Council.

The Organization of the Petroleum Exporting Countries (OPEC), de facto directed by Saudi Arabia, urges the group of producers and its allies to reduce supply by 1 to 1.4 million barrels per day in order to adapt slowing growth in demand and avoiding oversupply.

Russian Minister of Energy Alexander Novak said on Monday that Russia, which is not a member of OPEC, planned to sign a partnership agreement with the group, and that details would be discussed at the OPEC meeting in Vienna on 6 December.

Despite Monday's gains, crude prices remained almost a quarter below their recent highs in early October, driven by soaring supply and slower demand growth.

This comes in part after Washington granted Iran's major oil customers, mainly in Asia, unexpectedly large exemptions from the sanctions it imposed on Tehran in November.

The Japanese refiner Fuji Oil is expected to resume its purchases of Iranian crude after Japan has received one of these exemptions, industry sources in the sector said.

Japan had stopped all its purchases of Iranian oil before receiving the waiver in early November.

Despite this, markets remained wary of serious trade disputes between the world's two largest economies, the United States and China, after the two countries failed to find a solution to the Asian economic cooperation crisis. -Pacific (APEC) last weekend.

Hussein Sayed, Senior Market Strategist at FXTM, Futures Broker, Says US Comments from APEC "suggest that an agreement between President Trump and President Xi is unlikely to see the light when leaders will meet at the G20 summit this month. "

GRAPHIC: drilling, production and storage of oil in the United States tmsnrt.rs/2PBfE7z

MORE DRILLING, MORE OIL

Meanwhile, oil production in the United States is rising.

US energy companies added two oil platforms on November 16, bringing the total to 888, the highest level since March 2015, a weekly report from energy services firm Baker Hughes said Friday.

Increased drilling activity points to a further increase in crude oil production in the United States, which has already jumped nearly a quarter this year to a record 11.7 million bpd.

Reflecting on the surge in supply and slowing demand, financial markets have become increasingly suspicious of the oil sector, as fund managers have reduced their upward bets on futures contracts. and gross options at the lowest level since June 2017, the US Commodity Futures Trading Commission (CFTC) said Friday.

The speculation group reduced its combined futures and options positions on US crude and Brent crude during the week ended November 13th, the lowest since June 27, 2017.