Crude oil prices rise on optimism of cuts, after U.S. draw report

Dec. 7 (UPI) -- Crude oil prices rose early Friday on optimism that OPEC and non-OPEC nations could announce production cuts, and also to reflect a draw on United States inventories reported Thursday, analysts said.

West Texas Intermediate front-month futures traded as of 9:23 a.m. at $53.62 per barrel, or 4.1 percent higher, while Brent front-month futures traded at $62.83, or 4.6 percent higher.

"Oil prices are on the rise, driven by the expectation of a positive result from the OPEC meeting," Matthew Smith, the director of commodity research at ClipperData, told UPI, referring to a potential accord to reduce production so that prices would increase.

OPEC and non-OPEC, oil-producing nations were set to discuss production cuts Friday in Vienna.

Even as there were reportedly difficulties by Saudi Arabia to convince fellow OPEC producers to agree to significant cuts, a cut of a minimum 500,000 barrels by Saudi Arabia, and a possible additional, possibly lower volume by Russia, was anticipated, an analyst told UPI earlier Friday.

"Regardless of the decision, someone isn't going to be happy. If a deal is done, U.S. President Donald Trump will be riled. If a big enough cut isn't agreed upon, then the bulls will be left wanting and OPEC members should expect lower revenues amid subdued prices," Smith added.

Traders have said in recent days that the market may have discounted a cut of a minimum 1.1 million barrels per day, and that anything short of that could drive prices lower.

Oil-producing nations were expected to act to to help prices recover. Prices have plunged in recent months with Brent futures declining from a high of $86 per barrel on October 3 to hitting a low of below $60 per barrel, as recently as last week.

Another reason that could be helping prices was news of an inventory draw by the United States, the world's biggest producer of crude oil but which also imports large volumes. U.S. President Donald Trump had expressed in recent weeks wishes for crude prices to be even lower than recent depressed levels.

"Energy Information Administration data showed U.S. crude inventories falling by 7,300,000 barrels, the first draw down since September," independent analyst Lakshan De Silva told UPI.

"In a move towards potential future energy independence, U.S, exports of crude and refined products were 211,000 barrels per day higher than imports, the first instance of such an occurrence since EIA started maintaining data starting 1973," De Silva added.

The United States became earlier this year the world's biggest crude oil producer, surpassing Saudi Arabia and Russia. The U.S. has managed production increases in recent years resulting from technology gains.