U.S. West Texas Intermediate (WTI) crude oil futures were at $59.14 per barrel at 0530 GMT, down 79 cents, or 1.3 percent from their last settlement.
Saudi Arabia's energy minister Khalid al-Falih seemed to have stopped the bleeding in the markets on Monday, saying the oil cartel OPEC and its allies agree there's a need to cut oil supplies next year by around 1 million barrels per day against October levels to balance out supply and demand.
Oil prices are staging a comeback, driving Brent crude oil above $70 following an announcement from the kingdom of Saudi Arabia indicating that the world's major crude producers plan to cut supply significantly in 2019.
US energy firms last week added 12 oil rigs in the week to November 9 looking for new reserves, bringing the total count to 886, the highest level since March 2015, Baker Hughes energy services firm said on Friday. According to Oilprice.com, United States shale production saw an increase of 400,000 bpd in the first week of November, pushing output up to 11.6 million barrels per day.More news: Man Shot Dead After Attack In Melbourne
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U.S. production of shale oil, which has added five mmbbl of oil to USA output over the last decade to move America onto a similar level as Saudi Arabia at around 11mn bpd, has also put downward pressure on oil prices. OPEC leaders made clear Trump's social media posts were the impetus for the production changes, which kept oil prices low ahead of both the midterm elections and Trump's expected move to reimpose sanctions on Iran.
The group, including Russian Federation and Saudi Arabia, warned that crude supply would outstrip demand next year.
"A new strategy needs to be formed. whether it is a cut in production or something else, but it will not be an increase in production", he said. Nearly two-thirds of the 7.8 million barrels of extra oil that OPEC expects the world to need in 2025 could come from planned capacity expansions in Iraq, Kuwait and Abu Dhabi, Bloomberg calculations show. Oman, one of the smaller members of the OPEC, chipped in, stating that it would support a motion to cut oil supplies by 1 million barrels per day.
RBC Capital Markets says the likelihood of an official production cut at OPEC's December 6 meeting has increased. "In contrast, if oil prices fall it will benefit the currencies of major oil-importing emerging markets including the Indian rupee and Turkish lira". "We need not overreact" to falling prices, Mazrouei said, adding that crude was a dynamic market.
Dudley said the waivers had been unexpected, so the market had been readjusting. US crude rose 60 cents to $60.79 a barrel, the first increase after the longest stretch of daily declines since 1984.
Oil slumped into a bear market last week, as fears of a supply glut deepened on US waivers for some buyers of Iranian oil, as well as rising inventories and record production in America.