Oil rises after eight days of losses

WTI futures advance 0.9%, having lost 8% since October 26 as Opec considers output cuts

Oil gained after an eightday losing streak in New York as Opec was said to consider cutting output again, offsetting concerns that crude is continuing to pile up in the US. West Texas Intermediate futures advanced 0.9 per cent, having lost 8 per cent since October 26.

The Organisation of Petroleum Exporting Countries and its allies may discuss the possibility of cutting production again next year when they meet in Abu Dhabi on Sunday. Meanwhile, government data showed US stockpiles rose by 5.78 million barrels last week, compared with expectations for a 2-million-barrel gain.

Oil slumped last month as fears of supply squeeze receded, a prospect further allayed this week as the US permitted eight nations to keep buying some crude from Iran despite a new set of sanctions against the Opec member. Consultant FGE estimates the waivers will allow Iran to continue shipping 1.2 million to 1.7 million barrels a day, more than previously expected.

“Opec and Russia may use cuts to support prices at $70 a barrel,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank in Copenhagen. “But the US sanctions waivers could prevent prices from breaking above $80.”

WTI crude for December delivery traded 54 cents higher at $62.21 a barrel on the New York Mercantile Exchange at 10:07am in London. The contract fell 0.9 per cent to $61.67 on Wednesday. Total volume traded was 9 per cent above the 100-day average.

Brent futures for January settlement gained 72 cents to $72.79 a barrel on the London-based ICE Futures Europe exchange. Prices lost 1.5 per cent in the previous two sessions. The global benchmark crude traded at a $10.40 premium to WTI for the same month.

At the gathering in Abu Dhabi, Opec and its allies will discuss scenarios including a second production U-turn that would curb output next year, according to delegates. Pressure is likely to decrease from the US to lower prices as the country’s midterm elections are over, Hansen said.

Producers including Saudi Arabia and Russia had opened taps following unprecedented political pressure from President Donald Trump. After meeting with Russian Energy Minister Alexander Novak in Moscow, Lukoil First Vice President Ravil Maganov told reporters that a resumption of cuts cannot be ruled out, but they didn’t discuss specific figures.

US crude inventories rose last week for a seventh week, the longest stretch of gains since early March, according to Energy Information Administration data.

Domestic production surged to a record 11.6 million barrels a day.