Nov. 26 (UPI) -- Crude oil prices saw gains Monday morning as they recovered following a plunge on Friday, buoyed by speculation of cuts and geopolitical tension.
WTI front-month crude oil futures rose 2.9 Percent to $51.89 per barrel just after 10:00 a.m. EST while Brent front-month was nearly 3 percent higher at $60.79 per barrel.
WTI fell to $50.42 per barrel on Friday, down 7.7 percent from $54.63 per barrel in the previous session. Brent fell to $59.04 per barrel, or 6.1 percent, from $62.88 in the previous session. The declines marked the lowest levels for both in over a year.
"Crude oil has ticked higher following Friday's drubbing on continued speculation that the current low levels have brought forward attempts by producers to halt the slide," Ole Hansen, head of commodity strategy at Saxo Bank, told UPI.
"After Friday's panic selling, the move to the downside may be somewhat overdone," Justin McQueen, DailyFX analyst, separately told UPI.
There is ongoing speculation that Russian and Saudi Arabian leaders may meet and agree on oil production cuts during the G20 summit to take place in Argentina at the end of the month.
"At the G20 meeting in September 2016 Saudi Arabia and Russia took their first steps towards cooperation in order to support the oil price. The market is now looking for a potential repeat," Hansen said.
In addition, "rising tensions between Russia and Ukraine has provided an additional boost to oil prices," McQueen added.
According to reports, during the weekend three ships from Ukraine were sailing off the coast of Crimea, annexed by Russia in 2014, when Russian special forces opened fire and stormed the vessels. International sanctions were imposed in 2014 against Russia, one of the three biggest crude oil producers in the world along with the United States and Saudi Arabia.
However, reports from unnamed sources in the media about large production increases this month in Saudi Arabia contributed to bearishness.
According to both Hansen and McQueen, unnamed-source reports published Monday that Saudi Arabia pumped output to about 11.2 million barrels per day are being considered by the market.
Hansen noted that level would represent "around a million barrel per day above the agreed production ceiling" in the latest OPEC and non-OPEC accords.
Saudi Arabia's energy minister had said in October it was ramping up production to cover any potential supply disruption that resulting from nuclear related sanctions that the U.S. imposed against Iran on November 5. This Saudi announcement helped prices ease from peaks in early October.
The United States announced the sanctions in May. However, on Nov. 5, as the sanctions went into effect, the U.S. announced waivers to eight nations that buy Iranian oil, including for three large buyers. Any supply disruption concern remaining at that time quickly shifted into views that the market had become oversupplied, also because of rising U.S. output.
Saudi Arabia produced 10.6 million barrels of crude oil in October, according to the latest OPEC report.
"Eyes will be on commentary relating to the potential production cuts ahead of the OPEC meeting," McQueen said.
The OPEC will hold a meeting on December 6 in Vienna. There has been speculation that production cuts will be announced at that time following declines that started mainly in the second half of October that extended into November.