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

 Oil breaks above , but doubts about growth curb gains

By Stephanie Kelly

NEW YORK (Reuters) - Oil prices rose about three percent on Monday, clawing back some of the previous session's steep losses, although uncertainty over global economic growth and further signs of increasing supply put a cap on gains.

Brent crude futures rose $1.86 to $60.66 a barrel, a 3.2 percent gain, by 11:26 a.m. EST (1626 GMT). U.S. West Texas Intermediate (WTI) crude futures rose $1.44 to $51.86 a barrel, a 2.9 percent gain.

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.

"We're rebounding," said Phil Flynn, an analyst at Price Futures Group in Chicago. "A lot of people realized that the black and blue Friday was probably overdone and cooler heads are prevailing here a little bit."

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 U.S. hub of 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 on Monday.

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 U.S. crude futures 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 on Monday 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/bbl with our 2019 Brent forecast at $70/bbl," Goldman said.

(Additional reporting by Amanda Cooper in London and Henning Gloystein in Singapore; Editing by Louise Heavens and Chizu Nomiyama)

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Updated Date: Nov 27, 2018 00:05:47 IST