Investing.com - The selloff in oil paused Wednesday, after a record losing streak of 12 days, with crude futures lifted by murmurs that OPEC could cut output 40% more at its December meeting than previously intended.
OPEC and its partners were discussing a 1.4 million-barrels-per-day cut in output vs. the total 1.0 million-bpd reduction the group had proposed at a weekend meeting in Abu Dhabi with allies that included Russia, Reuters reported.
But Russia may not be on board for such a large reduction, Reuters said, citing three sources familiar with the situation.
That, along with signs that U.S. crude stockpiles data expected Thursday could show an eighth-straight week of builds, suggested to some traders that the rout in oil may not be entirely over. Underscoring that notion were Wednesday's market settlements that came sharply off the day's highs.
"The six-week oil sell-off has decimated technical levels in brute force futures market fashion," Merrill Lynch said in a note.
"While we await weekly charts to reach oversold, we note the next support juncture is $52 on WTI and $62 on Brent," it added.
U.S. WTI settled up 56 cents, or 1%, at $56.25 per barrel, after rising nearly 3% earlier in the session. On Tuesday, it plunged 7%, falling to a one-year low of $55.11. WTI has also lost 27% from four-year highs of nearly $77 in early October.
Brent was up 50 cents, or 0.8%, at $65.97 per barrel after a surging 3.3% earlier. Like WTI, Brent also fell almost 7% in the previous session, reaching an eight-month low of $66.67. It has lost almost 25% from a peak of nearly $87 six weeks ago.
OPEC, the EIA, along with Paris-based International Energy Agency (IEA), all say that oil supplies are likely to outstrip demand by early next year due to a potential cooling of the global economy and slower growth in China, which is in a trade war with the United States.
OPEC, which meets on Dec. 6 in Vienna for its policy-setting meeting, is widely expected to agree on cuts of around 1 million bpd or more from its current production of above 33 million bpd.
Russia and other key allies are scheduled to hold talks with the cartel a day later to determine the wider alliance's contribution to any market-balancing strategy reached by OPEC.
In the United States, nearly 38 million barrels have been added to crude inventories in the past seven weeks, six of them outsize builds, according to data released by the Washington-based Energy Information Administration (EIA).
U.S. crude output from seven major shale basins is expected to hit a record 7.94 million bpd in December, the EIA said on Tuesday.
Total U.S. crude production, meanwhile, stands at a record 11.6 million bpd, making the country the world’s biggest oil producer ahead of Russia and Saudi Arabia. Most analysts expect that output to climb above 12 million bpd in the first half of 2019.