SINGAPORE (Reuters) – Oil prices rose around 1 percent on Monday as traders expect Saudi Arabia's main exporter to push the OPEC producer club to cut supplies towards the end of the year.
The rainbow is seen above the pumpjack at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS / Christian Hartmann
Nonetheless, market sentiment remained weak amid signs of slowing demand amid deep trade disputes between the world's two largest economies, the United States and China.
Brent crude oil futures next month LCOc1 were at $ 67.29 a barrel at 0259 GMT, up 53 cents, or 0.8 percent, from their last close.
US West Texas Intermediate (WTI) crude oil, CLc1, rose 71 cents, or 1.3 percent, at $ 57.17 a barrel.
"The market's bullish rally is still awaiting OPEC + to provide a substantial cut rate," said Stephen Innes, head of trading for Asia Pacific at the Oanda futures broker in Singapore.
The de-facto Organization of the Petroleum Exporting Countries (OPEC), which is headed by Saudi Arabia, is pushing cartels of producers and allies to cut 1 million to 1.4 million barrels per day (bpd) of supply to adjust slowing demand for growth and prevent oversupply.
Despite Monday's rise, crude oil prices remained almost a quarter below the recent peak in early October, weighed down by a surge in supply and slowing demand growth.
This happened in part after Washington gave Iran's main oil customers, mostly in Asia, an unexpected exception to sanctions that were reinstated in Tehran in November.
Japan Refiner Fuji Oil is set to continue purchasing Iranian crude after Japan received one of the waivers, industry sources familiar with the matter said.
Japan has stopped all Iranian oil purchases before accepting release in early November.
Meanwhile, oil production in the United States surged.
US energy companies added two oil rigs in the week to November 16, bringing the total to 888, the highest level since March 2015, a weekly report by energy services company Baker Hughes said on Friday.
Increased drilling activities showed a further increase in US C-OUT-T-EIA crude oil production, which has surged almost a quarter of this year, to a record 11.7 million barrels per day.
Delayed by a surge in supply and slowing demand, financial markets have become increasingly wary of the oil sector, with money managers cutting their bullish bets on crude futures and options to the lowest level since June 2017, the US Commodity Futures Trading Commission (CFTC) said on Friday .
Speculators cut the combined futures and options positions on US crude and Brent during the week ending November 13 to the lowest since June 27, 2017.
Reporting by Henning Gloystein; Editing by Joseph Radford