Oil firms as OPEC output cuts loom, but rising U.S. supply stems gains
International Brent crude oil futures LCOc1 were at $59.81 per barrel at 0347 GMT, up 30 cents, or 0.5 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 20 cents, or 0.4 percent, at $51.65 per barrel, told Reuters.
Despite the firmer prices, crude oil has lost almost a third in value since early October because of an emerging supply glut following a global surge in production, including from the United States, Russia and by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC).
To rein in the glut, OPEC and its main partner Russia are moving closer to an agreement around further production cuts.
ANZ bank said on Friday that oil prices were rebounding “as signs that OPEC+ was moving closer to an agreement around further production cuts.” The producer group plus non-OPEC member Russia will gather on Dec. 6 and 7 in Vienna to discuss output policy.
Before that, the world’s top three producers - the United States, Russia and Saudi Arabia - will be part of a meeting of the Group of 20 industrialized nations in Buenos Aires, Argentina, this weekend.
Part of the glut is swelling supply in the United States, where commercial crude oil inventories C-STK-T-EIA rose by 3.6 million barrels in the week to Nov. 23 to 450.49 million barrels, according to the Energy Information Administration (EIA). Production C-OUT-T-EIA remained at a record 11.7 million barrels per day (bpd).
Crude reserves increased 6.4 billion barrels, or 19.5 percent, to 39.2 billion barrels at year-end 2017, marginally higher than the previous record of 39 billion barrels set in 1970, the EIA said.
“With fears over excessive supply and worries about falling demand the primary themes weighing on oil markets, the outlook for Brent Crude and WTI remains bearish,” said Lukman Otunuga, analyst at futures brokerage FXTM.