SINGAPORE (Reuters) – Oil prices rose on Monday as traders had expected Saudi Arabia, the country's biggest exporter, to pressure the OPEC producer group to cut supply by the end of the year.
A rainbow is seen over a pumpjack during the sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS / Christian Hartmann
Despite this, market sentiment remains weak in the face of signs of a slowdown in demand amid deep trade disputes between the world's two largest economies, the United States and China.
Brent LCOc1 futures, the international benchmark for oil prices, were trading at $ 67.29 a barrel at 0045 GMT, up 53 cents, or 0.8 percent, from the latest close.
US West Texas Intermediate (WTI) crude futures, CLc1, rose 61 cents, or 1.1 percent, to $ 57.07 a barrel.
"The market's upward radar still expects OPEC + to present a considerable number of cuts," said Stephen Innes, Asia Pacific's director of operations at futures brokerage Oanda in Singapore.
The Organization of the Petroleum Exporting Countries (OPEC), in fact led by Saudi Arabia, is pushing for the cartel of producers and their allies to reduce from 1 million to 1.4 million barrels per day (bpd) of supply to adjust slowing demand growth and avoiding oversupply.
Despite Monday's gains, oil prices remain almost one quarter below their recent peaks in early October, pressured by rising supply and slowing demand growth.
On the demand side, oil imports from Japan in October – which are the fourth largest in the world but are in structural decline due to population decline and energy efficiency – fell 7.7% from the same month last year to 2.77 million barrels. per day (bpd), the Finance Ministry said on Monday.
This is because supply in the United States is increasing.
US energy companies have added two oil rigs in the week to November 16, bringing the total to 888, the highest level since March 2015, a weekly report by energy services company Baker Hughes said on Friday .
The increase in drilling activity points to a further increase in US oil production C-Out-T-EIA, which has already risen nearly a quarter this year, to a record 11.7 million bpd.
Delayed by increased supply and slowing demand, financial markets have become increasingly wary of the oil sector as money managers cut their bets on futures and options to the lowest level since June 2017, US Commodity Futures Trading. Commission (CFTC) said on Friday.
The speculator group reduced its combined futures and options positions on US crude and Brent during the week ended Nov. 13 to the lowest since June 27, 2017.
Report of Henning Gloystein; Edition of Joseph Radford