Crude oil prices gain on Monday

"This rally's going to fade in a week or two as USA crude stocks go higher and macro pressure from the dollar builds".

Members of the Opec countries would collectively cut output by 700,000 barrels a day under the accord hashed out last week in Algiers, while non-Opec states would reduce production by another 500,000, Del Pino said in an e-mailed statement on Tuesday. From an initial production of 290,000 barrels per day, there would be now an expected output of half a million barrels per day.

U.S. shale producers were hedging future oil output at their highest levels this year, analysts at Morgan Stanley noted, as the calendar 2017 strip for crude hit mid-August highs of $US52.29 on Tuesday. The kingdom is widely seen as OPEC's de facto leader and the world's swing producer.

Meanwhile, oil-producing countries that rely on exports for much of their budget revenues are struggling with increasingly strained public finances. US crude oil production and and market data, as well as rig count should be watched closely as these data are what will determine if oil prices will continue its upward movement or will face a huge resistance at $50/bbl as it did before. Most of the OPEC members in the Persian Gulf region are impacted less than their peers, the report found. Although it hasn't yet worked out all the details, and analysts are skeptical the cut will be implemented, the deal is supporting the market.

The news about OPEC oil deal was a surprise to the oil market.

Iran wants to regain its pre-sanctions production level of four million bpd.

September crude exports increased slightly from the previous month to about 2.2 million bpd, the sources added.

Yet so far, there are few signs of production cuts outside OPEC.

Talks with Russian officials this week could add additional weight to an oil production agreement reached last week in Algeria, Venezuela's president said. He explained that the agreement will be possibly approved on November 30, in the next OPEC meeting in Vienna, with the participation of countries alien to the organization, as Russia, Azerbaijan and Oman, and others that are still defining their volume to be frozen.

Crude prices were undermined to some extent by a firm dollar as the trade-weighted USA index strengthened by close to 0.50% on the day.

The Dutch bank said that higher prices "are possible within the coming weeks to next few months, although limited". A close eye must be kept on trends in shale oil production.

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