Oil prices surge on cut pledge, US-China deal

Oil prices surge on cut pledge, US-China deal

The group, along with non-OPEC member Russian Federation, is expected to announce cuts aimed at reining in a production surplus that has pulled down crude prices by around a third since October.

The price of "black gold" are rising in anticipation of production cuts and supply of raw materials, which is likely to be accepted members of OPEC+ 6 December at the Ministerial meeting in Vienna.

On Thursday, oil prices bounced as Russia President Vladimir Putin said that his country was in contact with OPEC and willing to continue cooperation with the Saudi-led oil cartel.

"Iraq will probably say the right things regarding the OPEC meeting, about constraining or reducing output or even just "expressing support" for new output cuts", said Michael Barry, director of research at consultant FGE in London. "But the details are now what matter - how much will be cut, from when, for how long and, crucially, from what baselines".

On Tuesday, oil prices dropped slightly ahead of the scheduled OPEC meeting.

OPEC, which pumps four-in-10 barrels produced worldwide, will convene in Vienna on December 6 to discuss output cuts after oil prices in November suffered the largest monthly drop since the global financial crisis in 2008.

The unity Putin and the Saudi crown prince showed at the G-20 meeting amid all the controversies shifted the momentum in favor of a new agreement, said Ildar Davletshin, an oil and gas analyst at Wood & Co.

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Brent crude, the global benchmark, is down about a third from an October high due to rising supply from the US shale regions, Saudi Arabia and Russian Federation, slower demand growth and American waivers on oil sanctions on Iran.

France's President Emmanuel Macron, who has faced intense protests against growing gasoline prices in his country, also called for cheaper oil at the G-20 summit. (WTI) crude futures were at $53 per barrel at time of writing, up $2.07 per barrel, and 4.1% from last close. Brent crude rose 5.3 percent or $3.14 to a high of $62.60 and was last trading around $61.60.

As the downbeat mood takes hold, analysts at Oppenheimer said in a Friday note that they're cutting their WTI oil price estimate for 2019 by 15%, to $61 a barrel.

According to the government, production capacity in Alberta now exceeds transportation capacity by 190,000 barrels a day, and there are 35 million barrels of crude in storage, double the normal level.

The U.S., which is been pumping shale oil at a record rate, has been leaning on Iraq to resume production at northern fields around the city of Kirkuk and to resolve its oil-revenue disputes with the Kurdish administration.

Meanwhile, the number of active drilling rigs in the United States decreased by three to 1,076 in the week ending November 30.

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