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UPDATE 7-Oil prices soar on renewed hopes of OPEC output deal

Published 16/11/2016, 02:50 am
© Reuters.  UPDATE 7-Oil prices soar on renewed hopes of OPEC output deal
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* Signs OPEC may agree to curb output at meeting on Nov. 30

* Oil prices bounce after a month of falls

* Nigeria militants claim attack on key oil pipeline (Updates throughout, adds U.S. market moves, milestones, quote, changes dateline to NEW YORK; previous LONDON)

By Devika Krishna Kumar

NEW YORK, Nov 15 (Reuters) - Oil prices jumped 4 percent on Tuesday, bouncing back from multi-month lows on expectations that OPEC will agree later this month to cut production to reduce a supply glut.

Saudi Energy Minister Khalid al-Falih is expected to travel to the Qatari capital, Doha, this week for meetings with oil-producing countries on the sidelines of an energy forum, sources familiar with the matter told Reuters. Organization of the Petroleum Exporting Countries is due to meet on Nov. 30 to agree to limit output. An outline deal was reached in September but negotiations on the detail are proving difficult, officials say. and analysts also pointed to a report from Monday about a last ditch effort by OPEC to bring the world's top producers together to rein in production, saying it triggered a wave of short covering. (http://bloom.bg/2eTLwNI)

Brent futures LCOc1 rose $1.68, or 3.8 percent, to $46.11 a barrel by 10:30 a.m. EST (1530 GMT). U.S. crude CLc1 rose $1.73 to $45.05 per barrel, a 4 percent gain.

Brent hit a three-month low of $43.57 on Monday while U.S. crude also dropped to a three-month low of $42.20 in the previous session.

"Clearly the market is now seeing increased chances of an OPEC production cut," Commerzbank (DE:CBKG) analysts said in a note.

"There is doubtless considerable pressure to take action, as the oversupply will not reduce itself"

News of an attack on a major oil pipeline in Nigeria, the Nembe Creek Trunk Line in the southern Niger Delta, gave an additional push to prices. weaker dollar .DXY also boosted greenback-denominated crude oil. USD/

However, the underlying fundamentals were still bearish, traders said, pointing to rising U.S. shale production.

U.S. producers had rushed to lock in future output as prices breached the key psychological level of $50 barrel, keeping the threat of continued drilling high, even in a low-price environment. analysts said oil markets were due an upward correction after a month of declines.

"The current active contract (for U.S. crude) is expiring. The last trading day is next Monday, so some oil traders are already starting to close out their positions to roll over," Philips Futures investment analyst Jonathan Chan in Singapore said.

But rising Libyan oil production could cap gains.

A tanker carrying the first freshly produced cargo of Libyan crude to be exported since the Ras Lanuf terminal reopened in September left the port on Monday.

Libya's oil production has almost doubled to around 600,000 barrels per day in recent weeks.

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