Oil prices surge on output cut pledge US-China deal

Gulf OPEC members covered output gap left by Iran on Trump’s call

Saudi minister: OPEC+ deal 'supports global economy'

Russian Federation and Saudi Arabia agreed to extend into 2019 their agreement to manage the oil market, known as OPEC+ at the weekend's G20 meeting in Argentina.

"I explained to (Suarez) the results of the OPEC+ agreement on the stability of oil markets, which serves the interests of producers, consumers and investors and supports the global economy", he wrote.

Russian President Vladimir Putin announced the extension after a meeting Saturday on the sidelines of the Group of 20 with Saudi Arabian Crown Prince Mohammed bin Salman. Last Wednesday, the market took a further hit when Khalid al-Falih, the Energy Minister of the Kingdom of Saudi Arabia, said that his country would not reduce its output alone in order to stabilise the market.

Saudi Arabia said through its state-owned press agency that Riyadh and Moscow had held talks in Buenos Aires about "rebalancing" the oil market.

Putin said he had no concrete figures on the extent of the future output cuts.

Reports Friday, citing comments from a delegate to Bloomberg, said an OPEC committee has suggested a 1.3 million-barrel cut from the October production level. Yet the view that the oil market is oversupplied is a signal the cartel is laying the groundwork for action.

Both main contracts have plunged by about a third since hitting four-year highs at the start of October, hit by a number of factors including easing demand, high production, softer-than-expected United States sanctions on Iran and a global growth slowdown.

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Prices, however, significantly pared much of their early Friday losses as speculation has grown over a potential production cut by major oil producers, ahead of the OPEC meeting.

"From Argentina to Alberta, the oil market news is about supply curtailments", said Norbert Rücker, head of commodity research at Swiss bank Julius Baer.

In public and private, Trump has told the Saudis he wants cheaper crude, even disclosing that he berated the crown prince in an October phone call when global benchmark Brent surged above $80.

Oil prices have stopped dropping after a continual sixth-week loss. The oil production of Russian Federation has also reached above 11 Million bpd in the past few months.

USA light crude oil rose $2.92 a barrel to a high of $53.85, up 5.7 percent, before easing to around $53.00 by 0930 GMT.

France's President Emmanuel Macron, who has faced intense protests against growing gasoline prices in his country, also called for cheaper oil at the G-20 summit.

OPEC will meet on December 6 in Vienna to deliberate on the output cut after the oil price slumped to the biggest monthly drop since the global financial crisis in 2008.

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