The OPEC and its partners discuss the reduction of the offer

NEW YORK (Reuters) – Oil rose nearly 2 percent on Wednesday, after offsetting some of the massive sales from the previous session, on the growing prospect of a reduction in production from the World Trade Organization. oil exporting countries and allied producers at a meeting next month. market.

After a record loss of 12 consecutive days and the largest single day loss in more than three years, the oil market has reversed after the announcement by Reuters that OPEC and its partners were discussing a proposal to reduce production by 1.4 million barrels per day (bpd), a figure higher than that previously mentioned by the authorities.

Brent LCoC1 increased from $ 1.03, or 1.6%, to $ 66.50 per barrel at 1:37 pm EST (1837 GMT), after peaking at $ 67.63.

CLc1 US crude futures rose 85 cents, or 1.5%, to $ 56.54 a barrel, following a 12-session decline on Tuesday, the lowest since November 2017.

The price of the global benchmark Brent has fallen more than 20% since early October due to concerns over excess supply and slowing demand, one of the declines the most marked since the collapse of prices in 2014.

"The market has plummeted in recent weeks and today's pop is tied to the fact that producers could cut up to 1.4 million bpd in 2019," said Gene McGillian, vice -president market research for Tradition Energy in Stamford, Connecticut.

"Maybe some of the fears of additional supplies and reduced demand have finally been incorporated into the market, but I would not say that a floor has already been installed."

The relative strength index (IRS) of the two contracts remained below 30, a technical level often seen as a sign of a market plummeting.

The sale on Wednesday was further exacerbated by traders' unwinding of natural gas trading, market participants said. When oil fell from its peak in October, NGc1 natural gas futures rose 56% over this period to a record high of 4½ years.

In addition, financial companies are hedging the risk of selling put options to oil producers, putting additional downside pressure when prices fall, resulting in an option strike, said Goldman Sachs in a note.

Oil markets are under pressure from two sides: an increase in the supply of OPEC, Russia, the United States and other producers; and growing concerns about the global economic slowdown.

"This market is trying to find a price floor after an unprecedented 12 consecutive days of decline," said Jim Ritterbusch, president of Ritterbusch and Associates, in a note.

"Although the supply surplus is still relatively modest, the market is focused on the dynamics of expanding the overhang that will have to show signs of turning around before a bottom up. price can be established. "

In its monthly report, the Paris-based International Energy Agency (IEA) said the implied inventory buildup for the first half of 2019 was 2 million bpd.

The IEA left its global demand growth forecast for 2018 and 2019 unchanged from last month at 1.3 million bpd, respectively 1.4 million bpd, but cut its forecast for growth in non-OECD demand, the engine of the expansion of global oil consumption.

US crude oil production from its seven major shale basins is expected to hit a record 7.94 million bpd in December, the Energy Information Administration (EIA) of the US Department of Energy said Tuesday.

Increased onshore production allowed US C-OUT-T-EIA crude production to hit a record 11.6 million bpd, making the United States the world's largest oil producer ahead of Russia and Saudi Arabia.

Most analysts expect US production to exceed 12 million bpd in the first half of 2019.

The increase in US production contributes to the increase in inventories. Prior to the release of industry data on Wednesday and the government's report released on Thursday, analysts were predicting an increase in crude inventories of 3.2 million barrels, the eighth consecutive weekly rise.