By Henning Gloystein

SINGAPORE (Reuters) – Crude futures rose on Monday after gaining over 15 percent last week, with some indicators pointing to the possibility the market could be bottoming out.

Brent futures had climbed almost half a dollar, or 1.2 percent, from their previous close to $35.51 a barrel by 0425 GMT on Monday.

U.S. West Texas Intermediate (WTI) crude futures were up 16 cents at $32.94 a barrel after gaining over 15 percent the previous week.

Analysts said that first signs of a stronger outlook were appearing after a 20-month rout that has seen prices fall by 70 percent.

“The U.S. crude market seems to have passed the worst point and crude runs should start creeping higher, taking pressure off inventory levels,” said Richard Gorry, director of JBC Energy Asia.

“The latest EIA data on U.S. production is also supportive as it indicates that the low prices are finally having an impact,” he said, referring to numbers from the U.S. Energy Information Administration.

U.S. shale producers cut oil rigs for a 10th week in a row to the lowest levels since December 2009, data showed on Friday, which analysts expect will lead to a production fall of 600,000 barrels per day this year.

Morgan Stanley said a potential Russian/Saudi agreement to freeze output at January levels could also drive prices.

“Russia said production freeze agreement discussions should end on March 1… Any news of progression could drive headlines and prices,” the bank said, but added that “we still question the efficacy of a freeze.”

Market data also suggests early signs of shifting sentiment.

The amount of open positions in WTI crude contracts that bet on a further fall in prices has fallen over 17 percent since mid-February to their lowest level in 2016, although by historic levels their amount remains high.

At the same time, financial speculators have sharply raised their bullish bets on oil after talk of a global production freeze and signs of falling U.S. shale crude output and growing gasoline demand.

Money managers raised their combined net long position in crude futures and options in New York and London by nearly 16 percent for the week ended Feb. 23, data by the U.S. Commodity Futures Trading Commission (CFTC) showed.

ING bank said that technical market indicators “could be the early warning sign of a coming trend change.”

Despite this, JBC’s Gorry said there was also “still a lot of downside risk” due to the huge overhang in production and stored supplies, which in the United States are at historic highs.

(Reporting by Henning Gloystein; Editing by Joseph Radford and Richard Pullin)

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By Keith Wallis

SINGAPORE (Reuters) – Crude futures rose in Asian trade on Thursday after Iran welcomed plans by Russia and Saudi Arabia to cap production, although analysts said the move would not lead to any output cuts and Tehran offered no action of its own.

After oil prices rose in the previous session as much 8 percent, commentators suggested markets had overreacted to Iran’s support for the caps and said the Russian-Saudi move would not likely reduce the global surplus.

“I share the consensus view that producers are unlikely to reach an agreement (on cuts), the rationale being the need to satisfy two conditions,” said Ric Spooner, chief market analyst with Sydney’s CMC Markets.

“First, any price gains must offset losses achieved from volume cuts – production cuts must be meaningful – sufficiently large to achieve a substantial price increase. And they will have to involve everybody – all the major (producer) players. That will be difficult to achieve,” he said.

Brent futures <LCOc1> rose 42 cents to $34.92 a barrel by 0555 GMT, having closed 7.2 percent higher in the previous session after hitting an intraday high of $34.99.

U.S. crude <CLc1> gained 50 cents to $31.16 a barrel, having finished 5.6 percent higher in the previous session after touching a high of $31.49.

Oil prices would likely remain volatile, Spooner said, as traders and investors reacted to news and rumours about curbs on output growth and possible cuts in production.

Iranian Oil Minister Bijan Zanganeh met counterparts from Venezuela, Iraq and Qatar on Wednesday but did not say if Iran would cap its output in keeping with the move by Russia, Saudi Arabia and Iraq.

“The agreement will do little to reduce the current supply glut,” BMI Research said in a note on Thursday.

A rebalancing in supply and demand is more likely in the second half of 2016, BMI said.

Iran’s OPEC envoy Mehdi Asali said it was “illogical” to ask Iran to freeze production levels in comments to the Shargh daily newspaper before the talks on Wednesday.

Iran exported around 2.5 million barrels per day (bpd) of crude before 2012, but sanctions, imposed by world powers to curb Tehran’s nuclear programme, cut its oil shipments to about 1.1 million bpd.

The sanctions were lifted last month, allowing Iran to resume selling oil freely in international markets.

Oil prices also gained support after U.S. crude stocks unexpectedly fell by 3.3 million barrels last week to 499.1 million, data from the American Petroleum Institute showed on Wednesday.

“We continue to eye crude production and would think that it should start to decrease. Should this happen, we would think that this could be the start of U.S. production cuts due to low oil prices,” Singapore’s Phillip Futures said in a note.

Analysts had expected crude inventories to climb by 3.9 million barrels in the week to Feb. 12, according to a Reuters poll on Tuesday.

Oil prices may gain further direction when the Department of Energy’s Energy Information Administration releases official oil inventory data later on Thursday.

(Reporting by Keith Wallis; Editing by Tom Hogue and Gopakumar Warrier)

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