Nov. 14 (UPI) -- Crude oil futures were up early Wednesday on renewed expectations that OPEC and non-OPEC nations may agree in December to a significant production cut.
WTI front-month crude futures traded at $56.67 per barrel as of 9:35 a.m., or 1.8 percent higher, while Brent crude futures traded at $66.72 per barrel, up 1.9 percent, as of the same time.
"Crude prices are seeing relief this morning," Amir Hekmati, an oil futures spec trader at Lucid Energy, told UPI.
He said the increase resulted from renewed expectation, fueled by a press report citing unnamed sources, about ongoing discussion among crude producing nations, ahead of a formal early-December meeting, for a 1.4 million barrel per day cut.
Chances for a such a crude production cut are high, because Brent prices are below the $70 per barrel that many OPEC and non-OPEC countries use to prepare their budgets, Hekmati said.
"We expect an uneventful trading day for crude as traders await the API report at 4:30 EST today. Another build could be cause for another test of the lows. Overall we view this as a buying opportunity, but timing is key," he added.
Hekmati said that he anticipates crude production cuts will indeed be announced by December 6, "and this should reflect in inventory reports in February 2019. We are focused on positioning for a rally in February, and will look to the options market to do this," he said.
Options are a trading instrument that give holders the right to sell or buy a delivery contract at a determined point in the future.
Brent crude oil futures have declined from a peak of $86 per barrel on October 3. Prices had increased in the months leading up to October, in part as the U.S. announced in May that it was going to impose nuclear-related sanctions against Iran starting on November 5.
The announcement, as well as price increases, led to decisions to increase production by countries including Saudi Arabia. As a result, crude oil prices declined in October amid the announcements of production increases to help cover any potential disruption of supplies of crude oil from Iran.
Iran had been exporting 2.8 million barrels of crude oil exports as of April, before the sanctions were announced, out of a total 3.8 million barrels per day of production.
Crude oil prices extended the losses after November 5, when the U.S. granted waivers to several nations -- including large crude oil buyers India, China and South Korea -- so that they could continue to buy Iranian crude oil exports. The market had not anticipated those large waivers.