Market prices in OPEC supply forecasts decrease

LONDON (Reuters) – Oil stabilized on Monday after winning over the previous three sessions the fact that Saudi Arabia, one of the major exporters, will push OPEC and maybe Russia to reduce their supplies by the end of the year.

Brent futures fell 6 cents to 66.70 dollars a barrel at 12.43 GMT, while US futures contracts rose 3 cents to 56.49 dollars.

The Organization of the Petroleum Exporting Countries, led by Saudi Arabia, insists that the group and its partners reduce their production by one million to 1.4 million barrels per day in order to avoid an accumulation of unused fuel .

"It seems like the market is taking a cut for production for granted. We will see if it will be right after the next OPEC meeting on December 6th. It's not unreasonable to expect stable prices until that date, "said Tamas Varga, PVM Oil Associates' strategist.

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.

Brent is nearly 25% lower than the peak of 86.74 USD reached in early October 2018, as slowing demand materialized and US, Russian and Saudi output Arabia has reached historical records.

The US decision to grant waivers to some Iranian oil customers, who were facing a drop in supply following the sanctions that came into effect in early November, also helped to dispel concerns about the availability of crude.

A trade dispute between the United States and China is one of the reasons why investors are very worried about the growth prospects for oil demand next year.

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

Fund managers have reduced their upside exposure to crude oil futures and options to their lows since about mid-2017 this month.

Weekly trading data shows that the portfolio managers hold a combined net long position of approximately 364 million barrels of futures and options on US crude and Brent oil, up from 800 million barrels two months ago.

"The main trend remains bearish as investors no longer believe in a risk of tightening the supply of crude," said Carlo Alberto De Casa, chief analyst at ActivTrades.