Oil prices inch up on supply concerns


Global oil prices edged up from early losses on Monday despite assurances from Washington that Saudi Arabia, Russia and the United States can raise output fast enough to offset falling supplies from Iran and elsewhere.

U.S. Energy Secretary Rick Perry said in an interview with Reuters on Friday that he does not foresee any price spikes and that the countries, the world's top three oil producers, can between them raise global output in the next 18 months.

Brent crude oil futures gained 25 cents to $78.34 per barrel as of 0727 GMT, reversing a 0.2 percent loss earlier in the session.

U.S. West Texas Intermediate (WTI) futures rose 28 cents to $69.27 a barrel after posting a drop of 20 cents earlier in the trading session.

Iran's oil exports are falling as more buyers, including its second-largest buyer India, cut imports ahead of U.S. sanctions that will be re-imposed in November. Washington aims to cut Iran oil exports down to zero to force Tehran to re-negotiate a nuclear deal.

Iran's OPEC governor said on Saturday that Saudi Arabia and Russia have taken the oil market "hostage" and accused other producers of turning OPEC into a U.S. tool.

Iran is the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (OPEC).

Trading remained choppy amid an unresolved trade war between the United States and China.

U.S. President Donald Trump is likely to announce new tariffs on about $200 billion on Chinese imports as early as Monday, a senior administration official told Reuters on Saturday.

The escalating trade row is raising concerns about the potential for slower growth in oil consumption, offsetting supply concerns stemming from the upcoming U.S. sanctions on Iran over its nuclear program.

"The market's expectation of shortages has cooled after data from last week showed increases in supplies, while investors have lowered the outlook for oil demand," said Wang Xiao, head of crude research with Guotai Junan Futures.

Also weighing on oil prices, U.S. drillers added two oil rigs in the week to Dec. 1, bringing the total count up to 749, the highest since September, General Electric Co's Baker Hughes energy services firm said on Friday.

Brent crude's premium to WTI stretched as wide as $9.42 a barrel on Monday with investors expecting the premium to rise in the near term after data showed that investors placed more long bets on Brent versus WTI.

"Markets will be looking towards OPEC and Joint Technical Committee conference call for forward guidance on oil market fundamentals in the coming term," said Benjamin Lu, a broker at Philip Futures, in a note on Monday.

The Joint Technical Committee consists of members from OPEC and non-OPEC producers that coordinates the groups' current supply agreement. It is set to meet on Monday.

(Reporting by Meng Meng and Aizhu Chen; editing by Richard Pullin and Christian Schmollinger)