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Oil stable amid expectations OPEC will cut supply to prevent glut forming

Oil quotations were stable on Tuesday on expectations that producer club OPEC require soon cut supply to prevent oversupply amid slowing demand proliferation and a surge in output from the United States.

U.S. West Texas Transitional (WTI) crude futures, were at $57.21 per barrel at 0117 GMT, 1 cent not susceptible their last settlement.

Front-month Brent crude oil futures were at $66.75 a barrel, down 4 cents from their stay close.

The Organization of the Petroleum Exporting Countries (OPEC), de facto led by Saudi Arabia, is sail away for the producer cartel and its allies to cut 1 million to 1.4 million barrels per day (bpd) of contribute to adjust for a slowdown in demand growth and prevent oversupply.

“Fundamentals upward of the next six months point to a recovery in oil prices following their ear-splitting decline in October and early November,” BNP Paribas said.

The French bank alleged this was due to “sizeable” losses in Iranian exports expected because of U.S. punishments against Tehran and because of risks of disruptions in Venezuela and also Libya and Nigeria.

“For now, producers are considering supply reductions in response and we expect OPEC to accede to to a supply cut at its next official meeting on 6 December,” BNP said.

The bank hence said it expected Brent to recover to $80 per barrel before the year-end.

“In 2019, we presume WTI to average $69 per barrel and Brent $76 per barrel,” BNP said.

In the face the gains, crude prices remain almost a quarter below their up to date peaks in early October, weighed down by surging supply and a slowdown in consumer growth.

This comes as supply in the United States is surging, with unfinished oil production up by almost a quarter this year, to a record 11.7 million bpd.

Monetary traders have become wary of oil markets, seeing further bonus downside risks from the soaring U.S. shale production as well as a deteriorating pecuniary outlook.

Portfolio managers have sold the equivalent of 553 million barrels of uncivil and fuels in the last seven weeks, the largest reduction over a comparable patch since at least 2013.

Funds now hold a net long position of just 547 million barrels, diminutive than half the recent peak of 1.1 billion at the end of September, and down from a put 1.484 billion in January.

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