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Oil prices edge up on expected OPEC supply cuts

Published 2018-11-19, 07:56 p/m
© Reuters.  Oil prices edge up on expected OPEC supply cuts
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* OPEC, allies to meet on Dec. 6 to discuss supply cuts

* Cuts would counter demand slowdown, surge in U.S. output

By Henning Gloystein

SINGAPORE, Nov 20 (Reuters) - Oil prices edged up on Tuesday as markets expected producer club OPEC to agree to supply cuts at their next meeting on Dec. 6, aimed at preventing oversupply amid slowing demand growth and a surge in output from the United States.

U.S. West Texas Intermediate (WTI) crude futures CLc1 , were at $57.32 per barrel at 0048 GMT, up 12 cents, or 0.2 percent from their last settlement.

Front-month Brent crude oil futures LCOc1 had yet to trade.

Reuters' technical commodity analyst Wang Tao said on Tuesday Brent may rise into a range of $67.60 to $69.04 per barrel and WTI to $58.29 a barrel in the short-term. Organization of the Petroleum Exporting Countries (OPEC), de facto led by Saudi Arabia, is pushing for the producer cartel and its 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. over the next six months point to a recovery in oil prices following their sharp decline in October and early November," BNP Paribas (PA:BNPP) said.

The French bank said this was due to "sizeable" losses in Iranian exports expected because of U.S. sanctions against Tehran and because of risks of disruptions in Venezuela and also Libya and Nigeria.

"Meanwhile, producers are considering supply reductions in response and we expect OPEC to agree to a supply cut at its next official meeting on 6 December," BNP said.

The bank therefore said it expected Brent to recover to $80 per barrel before the year-end.

"In 2019, we expect WTI to average $69 per barrel and Brent $76 per barrel," BNP said.

Despite the 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 as supply in the United States is surging, with crude oil production C-OUT-T-EIA up by almost a quarter this year, to a record 11.7 million bpd.

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