Oil prices firmed on Friday on expectations that OPEC and Russia will agree some form of production cuts next week, although swelling US supplies kept markets in check.

International Brent crude oil futures were at $59.65 per barrel at 0533 GMT, up 14 cents, or 0.2 per cent, from their last close. US West Texas Intermediate (WTI) crude futures were up just 3 cents at $51.48 per barrel.

Despite firmer prices, crude oil has lost almost a third in value since early October because of an emerging supply glut following a global surge in production, including from the United States, Russia and by West Asian-dominated Organization of the Petroleum Exporting Countries (OPEC).

“Near-term oversupply has gutted Brent prices,” US investment bank Jefferies had said in a note on Friday, adding that there was “an increasing urgency to move crude into storage”.

This urgency is visible in the Brent forward price curve, which now has prices for future delivery above those for immediate dispatch, a structure known as contango which makes it attractive to put oil into storage for later sale.

To rein in the glut, OPEC and its main partner Russia are moving closer to an agreement around further production cuts.

ANZ bank said on Friday that oil prices were rebounding “as signs that OPEC+ was moving closer to an agreement around further production cuts.” The producer group plus non-OPEC member Russia will gather on December 6 and 7 in Vienna to discuss output policy.

“A credible message from OPEC's December 6 meeting is critical for price support,” Jefferies said.

Before the OPEC meeting, the world's top three producers - the United States, Russia and Saudi Arabia - will be part of a meeting of the Group of 20 industrialised nations in Buenos Aires, Argentina, this weekend.

Part of the glut is swelling supply in the United States, where commercial crude oil inventories rose 3.6 million barrels in the week to November 23 to 450.49 million barrels, according to the Energy Information Administration.

Production remained at a record 11.7 million barrels per day (bpd). Crude reserves increased 6.4 billion barrels, or 19.5 per cent, to 39.2 billion barrels at year-end 2017, marginally higher than the previous record of 39 billion barrels set in 1970, the EIA said.

“With fears over excessive supply and worries about falling demand the primary themes weighing on oil markets, the outlook for Brent Crude and WTI remains bearish,” said Lukman Otunuga, analyst at futures brokerage FXTM.

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