Oil prices rose by around 1 percent on Monday amid expectations that top exporter Saudi Arabia will push producer club OPEC as well as perhaps Russia to cut supply toward year-end. Front-month Brent crude oil futures were at $67.41 per barrel at 0746 GMT, up 65 cents, or 1 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures, were up 76 cents, or 1.4 percent, at $57.22 per barrel. “Oil prices continued to recover…(as) the market will be watching closely for the possible impact of a (supply) cut.” said Sukrit Vijayakar, director of Indian energy consultancy Trifecta.
The Organization of the Petroleum Exporting Countries (OPEC), de facto led by Saudi Arabia, is pushing for the producer group and allies to cut 1 million to 1.4 million barrels per day (bpd) of supply to adjust for a slowdown in demand growth and prevent oversupply. Russian Energy Minister Alexander Novak said on Monday that Russia, which is not an OPEC member, was planning to sign a partnership agreement with the group, and that details would be discussed at OPEC’s Dec. 6 meeting in Vienna.
Despite Monday’s gains, crude prices remain almost a quarter below their recent peaks in early October, weighed down by surging supply and a slowdown in demand growth. This comes in part after Washington granted Iran’s major oil customers, mostly in Asia, unexpectedly broad exemptions to sanctions it re-imposed on Tehran in November. Japanese refiner Fuji Oil is set to resume Iranian crude purchases after Japan received one of those waivers, industry sources familiar with the matter said. Japan had ceased all purchases of Iranian oil prior to receiving the waiver in early November.