Oil jumps towards $67 as OPEC, partners discuss proposal to cut output

Oil rose towards $67 a barrel on Wednesday, recouping some of the previous session`s slide, on the growing prospect of OPEC and allied producers cutting output at a meeting next month to prop up the market.

Crude rallied after three sources familiar with the issue said OPEC and its partners are discussing a proposal to cut output by up to 1.4 million barrels per day (bpd), a larger figure than officials have mentioned previously International benchmark Brent crude rose $1.18 a barrel to $66.65 as of 0955 GMT, having fallen as low as $65.02 earlier. U.S. crude was up 60 cents at $56.29.

Since mid-October, the price of Brent has fallen by 17.5 percent as concern grew about excess supply and slowing demand, n what has become one of the biggest declines since a price collapse in 2014.

"Crude oil futures succumbed to overwhelmingly bearish pressure," said Benjamin Lu, analyst at brokerage Phillip Futures in Singapore.

Oil markets are being pressured from two sides: a surge in supply from OPEC, Russia and other producers, and increasing concerns about a global economic slowdown that would hit demand.

US crude oil output from its seven major shale basins is expected to hit a record 7.94 million barrels per day (bpd) in December, the US Department of Energy`s Energy Information Administration (EIA) said on Tuesday.

That surge in onshore output has helped overall U.S. crude production hit a record 11.6 million bpd, making the United States the world`s biggest oil producer ahead of Russia and Saudi Arabia.

Most analysts expect U.S. output to climb above 12 million bpd within the first half of 2019. The rise in US production is contributing to higher stockpiles.

Official storage data is due on Wednesday from the Energy Information Administration, with analysts expecting a 3 million barrel rise in crude inventories.