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Oil prices rise after week of sharp falls

Published 07/11/2016, 12:30 pm
Updated 07/11/2016, 12:40 pm
© Reuters.  Oil prices rise after week of sharp falls
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By Henning Gloystein

SINGAPORE, Nov 7 (Reuters) - Oil prices rose in early trading on Monday, with traders citing opportunistic buying following sharp declines in the previous week on the back of ongoing weak fundamentals.

International Brent crude oil futures LCOc1 were trading at $45.92 per barrel at 0119 GMT, up 34 cents, or 0.75 percent, from their previous close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 0.40 cents, or 0.91 percent, at $44.47 a barrel.

Traders said that the main price driver had been opportunistic buying following last week's price falls, which were the steepest since January and their lowest level since August. market fundamentals remain weak.

Analysts said that a planned output cut to be decided during a meeting on November 30 by countries from the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers like Russia was encountering hurdles.

"Individual country details still remain challenging to agree upon," Barclays (LON:BARC) bank said in a note to clients.

"Iraq boosted production while Saudi Arabia asked for exceptions. Russia is still sitting on the sidelines, and none of the non-OPEC members consulted thus far has expressed any intention of a cut," it added.

There are also risks that the oil supply overhang, which has dogged markets for the last two years, could continue as OPEC's de-facto leader Saudi Arabia has threatened to increase production again should the upcoming meeting between producers lead to no result. if Saudi Arabia does not follow up on that threat, its exports could rise.

"Saudi local oil demand is falling, and just maintaining current output could imply higher exports," Barclays said.

In the United States there were also signs of rising future output as the number of drills looking for new oil to produce rose by 9 to 450 in the week to November 4, the highest level since February.

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