Oil steadies as Riyadh pushes for further supply cuts

Brent crude futures gained 17 cents to $61.09 a barrel by 1:14 p.m. EST (1814 GMT).

US West Texas Intermediate crude was up 25 cents, or 0.5 per cent, at $56.21 a barrel. The contract rose 1.4 percent to close at $55.96 on Monday.

Business a.m learnt that OPEC and its allies are in talks to further increase the existing supply cut of 1.2 million barrels per day (bpd) by 4,000 bpd with an extension till June 2020.

Crude oil prices were up on Tuesday as investors anticipate deeper production cuts from the Organization of Petroleum Exporting Countries (OPEC) and its allies later this week.

The factors behind this view included a large increase in production from legacy non-OPEC projects and a still uncertain outlook for demand growth, it added.

Goldman Sachs on Monday said that OPEC+ is likely to extend output curbs through June but expects the "uneventful" three-month extension to provide little support to prices.

Oil slipped below $56 as U.S. President Donald Trump said there may be a long wait for a trade agreement with China, casting doubt about the strength of demand just days before the OPEC+ meeting.

The investment bank said it expected Brent to trade around $60 a barrel in 2020, "absent new growth or geopolitical shocks".

OPEC's ministers will meet in Vienna on December 5 and the wider OPEC+ group will meet on December 6. "China trade war continue to weigh on prices but US crude inventories are expected to have declined last week which may lend some support", Phil Flynn, analyst at Price Futures Group in Chicago, said in a note.

The U.S. oil producer companies remained unperturbed due to the continuous increase in production with the hope to meet up with shortfalls as the global oil regulator is due to announce possible cuts in supply this week. Output from the Organization of Petroleum Exporting Countries slipped by 110,000 barrels a day last month, according to data compiled by Bloomberg, while analysts forecast United States crude fell last week for the first time since mid-October.

OPEC's de facto leader Saudi Arabia will agree to lower its quota to 10 million bpd from 10.3 million bpd and will press other producers, particularly Iraq, Nigeria and Russian Federation, to improve their compliance with previous commitments, JPMorgan analyst Christyan Malek wrote in the note.