Oil Rises as Prospects for Deeper OPEC Cuts Take Center Stage
Oil pump jack pumps, front, and storage tanks, in the distance, are seen on a farm near Corpus Christi, Texas. (Photographer: Eddie Seal/Bloomberg News)

Oil Rises as Prospects for Deeper OPEC Cuts Take Center Stage

(Bloomberg) -- Oil rose the most in more than a week as traders sifted for fresh signals of whether OPEC and allied crude producers will tighten supplies when they meet later this week.

Futures settled 1.4% higher in New York on Monday. Iraq has been hinting that the so-called OPEC+ group may shrink output again, contradicting other cartel members insisting deeper cuts are not in the cards. Money managers boosted bets on a price rally to the highest in six months.

“The OPEC comments are unique to oil and keeping the market in the green,” said Robert Yawger, futures director at Mizuho Securities USA LLC in New York.

Oil Rises as Prospects for Deeper OPEC Cuts Take Center Stage

Hedge funds increased their net-bullish position on the U.S. benchmark crude, or the difference between bullish and bearish bets, by 15% to 103,790 contracts, the U.S. Commodity Futures Trading Commission said on Monday.

Long-only wagers rose 12%, while shorts dropped 14%. The report was delayed from its usual Friday release because of the Thanksgiving holiday in the U.S.

Earlier in Monday’s session, futures surrendered some gains in response to a surprise decline in U.S. construction spending and a fourth straight monthly contraction in American manufacturing activity.

Adding to the gloomy data was a report that U.S. President Donald Trump was ready to hit China with stiffer tariffs if efforts toward a trade truce between the world’s two largest economies falter. Crude still hasn’t recovered from Friday’s 5.1% slump that was the worst in 2 1/2 months.

West Texas Intermediate for January delivery settled up 79 cents to $55.96 a barrel the New York Mercantile Exchange.

Brent for February settlement rose 43 cents to $60.92 on London’s ICE Futures Europe Exchange, and traded at a $5.01 premium to WTI for the same month.

Other oil-market news:
  • Gasoline futures settled 1.1% lower at $1.5733 a gallon
  • Russia, one of the key architects of the OPEC+ deal, in November produced above its target for the eighth month this year.
  • Nigeria is totally committed to the OPEC+ deal, the country’s oil minister Timipre Sylva said on a call with Saudi Arabia’s oil minister on Sunday, according to a statement seen by Bloomberg.

©2019 Bloomberg L.P.

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