"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. Downside risks in the form of slowing demand and rising USA shale production has outweighed the upside impact of Iranian sanctions and potential production cuts from OPEC.
Oil prices are around a quarter below their recent peaks in early October, weighed down by surging supply, especially from the United States, as well as a slowdown in global trade.
Russian Energy Minister Alexander Novak said Russia planned to sign a partnership agreement, and that details would be discussed at OPEC's December 6 meeting in Vienna.
The modest gains were said to have been triggered by news from Genscape that US crude inventories fell in the latest week; but Stephen Innes, strategist for OANDA, pointed out that while prices have also risen "on hope OPEC [the Organization of the Petroleum Exporting Countries] and partners will act to reverse bearish sentiment.from a technical set up, bear mode remains intact". An oversupplied crude market next year will help the USA cut Iranian sales further as President Trump targets the country's main source of income, a State Department official said.
Helping to keep a lid on prices are signs of lower demand due to the lingering trade disputes between the world's two biggest economies, the United States and China. The contract dropped $3.42, or 4.9 percent, last week.
US crude production has soared nearly 25 percent this year, to a record 11.7 million barrels per day (bpd).
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So far in the session, more than 868,000 front-month WTI contracts had changed hands, exceeding the daily average over the last 10 months.
Ahead of the bi-annual OPEC meeting on December 6th, expectations have been growing that the cartel will look to cut oil output (by roughly 1-1.4mbpd) in order to prevent oversupply given the slowing demand growth, coupled with the surge in oil production by the U.S. (currently producing at a record 11.7mbpd).
The number of working American oil rigs gained by 2 to 888 last week, the highest level since March 2015, Baker Hughes data said.
"OPEC continues to discuss a reduction of oil production to halt falling prices, but Russian Federation didn't seem too supports the idea that increases the responsibility of Saudi Arabia for any coordinated action", said analyst commodity sector Schneider Electric Robbie Fraser.
"Fundamentals over the next six months point to a recovery in oil prices following their sharp decline in October and early November", BNP Paribas said. 9, according to government data.
The International Energy Agency (IEA), which represents the interest of oil consumers, on Monday warned OPEC and other producers of the "negative implications" of supply cuts, with many analysts fearing that a spike in crude prices could erode consumption.