Oil breaks above $60/bbl, but doubts about growth curb gains

NEW YORK: Oil prices rose about 3 percent on Monday, clawing back some of the previous session's steep losses, although gains where capped by uncertainty over global economic growth and further signs of increasing supply, including record Saudi production.

Brent crude futures rose $2.03, or 3.5 percent, to $60.83 a barrel, by 1:11 p.m. EST (1811 GMT). U.S. West Texas Intermediate (WTI) crude was up $1.45, or 2.9 percent, at $51.87 a barrel.

Prices on Friday hit their lowest since October 2017 amid intensifying fears of a supply glut. Brent sank to $58.41 a barrel, while WTI fell to $50.15 a barrel.

"Prices slumped heavily last week," Commerzbank commodities analyst Carsten Fritsch said. "It is therefore not surprising to see a counter move."

Supporting oil prices, U.S. stock markets broadly rallied as Cyber Monday, the largest online shopping day of the year, began. Crude futures at times track with the equities market.

Prices found some support as crude stockpiles at the delivery point for WTI at Cushing, Oklahoma, rose just 126 barrels from Tuesday to Friday, traders said, citing a report from market intelligence firm Genscape.

However, demand concerns and record output from Saudi Arabia limited Monday's rebound.

Saudi crude oil production hit 11.1-11.3 million barrels per day (bpd) in November, an all-time high, an industry source said.

A rising dollar that has undercut demand in key emerging market economies, higher borrowing costs and the threat to global growth from the trade dispute between the United States and China have pushed investors out of assets more closely aligned with the global economy, such as equities or oil.

In November alone, hedge funds have pulled more than $12 billion out of the oil market, based on a record drop in net long holdings of Brent and WTI and options against the average oil price for the month.

Even the prospect of a near-certain cut in output by the Organization of the Petroleum Exporting Countries has not been enough to stem the slide.

OPEC meets in Vienna on Dec. 6, amid expectations that Saudi Arabia will push for a production cut of up to 1.4 million bpd by the producer club and its allies.

Goldman Sachs said the G20 meeting this week could be a catalyst for a rebound in commodities prices, possibly prompting a thaw in U.S.-China trade tensions and offering greater clarity on a potential OPEC oil curb.

Goldman believes OPEC and other nations will come to an agreement, leading to a recovery in Brent prices.

"While we didn't think that Brent prices were justified at $86 per barrel, neither do we believe that they are at $59 with our 2019 Brent forecast at $70," Goldman said.