Oil prices jump 2% after Saudi announces supply cut

Oil prices rose by more than two percent on Monday after Saudi Arabia announced a supply cut for December.

International benchmark Brent crude futures were trading higher at $1.5, or 2.1 percent, at $71.67 per barrel, while the US West Texas Intermediate (WTI) crude futures rose nearly $1, or 1.6 percent, to $61.16 a barrel.

Saudi Arabia's Energy Minister Khalid Al-Falih said on Sunday that the Kingdom will reduce its December allocations to customers by about 500,000 barrels per day (bpd) compared to November.

The Kingdom has been pumping 10.7 million bpd since October, he added.

Crude prices have declined by nearly 20 percent over a month, after supply has surged, especially by the top-three producers the US, Russia and Saudi Arabia.

US crude production, which has hit a record high of 11.6 million bpd, is set to increase further, given the rig count numbers reached 866, its highest level since March 2015, according to Baker Hughes.

The United States granted temporary exemptions to eight countries, allowing them to continue buying Iranian oil after Washington reimposed sanctions on Iran's banking, energy and shipping industries starting Nov.4.