Oil rises as Saudi Arabia seeks to tackle oversupply

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Saudi Arabia and Russian Federation are close, especially as a result of their pact in late 2016, along with other OPEC and non-OPEC producers, to curb output by 1.8 million barrels per day in order to prevent prices dropping too far - but oil markets have changed since then, largely as a result.

Brent crude futures rose 80 cents on the day to $70.98 a barrel by 1205 GMT, while U.S. crude futures rose 36 cents to $60.69 a barrel.

West Texas Intermediate, the US benchmark oil price, had been declining for the hour before the tweet and briefly dipped lower before trading at $60.14 per barrel, down 5 cents for the day, at 1:49 p.m.in NY.

Saudi Arabia plans to reduce oil supply to world markets by 0.5 million barrels per day in December, Khalid al-Falih, its Minister of Energy, Industry and Mineral Resource said on Sunday.

"Oil prices should be much lower based on supply", appears to have contributed to crude's fall from earlier higher levels in the session.

Concern about oversupply has pushed oil prices down by roughly 20 percent since early October.

As uncertainty beclouds the future of crude prices, members of the Organisation of Petroleum Exporting Countries (OPEC), met yesterday November 11th, in Abu Dhabi to decide on how to cut crude supply in order to forestall further declines in price.

Now officials from Saudi Arabia are suggesting they might cut supply to arrest the falling price.

"Hopefully, Saudi Arabia and OPEC will not be cutting oil production".

The market had anticipated that exports from OPEC member Iran would fall precipitously following the institution of US sanctions in November. Barron's Al Root noted that changes in output from the particular world region can have an outsized impact on commodity prices due to the major difference in what it costs to produce oil in the kingdom versus other places in the world.

The more Russia, Saudi Arabia, and their allies drive up prices now, the more profitable it will be for USA producers to boost production.

During a meeting in Baghdad, Iraq and Saudi Arabia's oil ministers also discussed an electricity grid connection between the two countries to meet Iraq's power needs, he said. "Meanwhile, a Saudi. output cut for December has helped boost ailing oil prices".

Commerzbank, Germany's second-largest lender, said Friday that oil producers must act to prevent prices tumbling.

Oil prices have since come under downward pressure from rising supplies, despite the new US sanctions on Iran.

Tehran, in response, dismissed Washington as Iranian President Hassan Rouhani said in a TV speech that it will "proudly break the unjust sanctions" and continue to sell oil. "Oil markets are significantly oversold in our view, and we remain convinced that both Brent and [US benchmark] WTI will rebound from their current bearish market mode", said analysts at MUFG bank. The uptick in supply and the United States granting of waivers to eight countries to keep importing Iranian oil despite United States sanctions re-imposition this month have contributed to the oil price fall.

Not even Saudi Arabia's promise to cut exports was enough to stem oil's slide.