Oil: Sidelined in Asia as Kuwait-Saudi Arabia near neutral zone deal

• Oil prices are sidelined on reports of the Saudi-Kuwait production deal. 
• Speculators boosted bullish bets on WTI to highest levels in seven months. 

Oil is lacking a clear directional bias in Asia with buyers staying on the sidelines possibly due to news that Kuwait and Saudi Arabia are closing on a deal to renew oil output along the border.

Brent oil is currently trading at $66 per barrel, representing little change on the day. WTI is trading at $60.34 per barrel, representing a 0.18% drop on the day. 

Kuwait and Saudi Arabia are expected to sign an agreement to resume oil output in the neutral zone on Tuesday. 

The production in the neutral zone, also known as the Divided Zone, between the borders of Saudi Arabia and Kuwait was shut three years ago. 

The resumption of production is expected to add some 500,000 barrels per day to the oil market.

Bullish bets rise to the highest level in seven months

Hedge funds boosted their net bullish wagers on WTI by 19% to  272,218 in the week ended Dec. 17. That is the highest level since April, according to U.S. Commodity Futures Trading Commission data. 

While long-only wagers jumped 13%, shorts fell by 24%.

The year-end optimism among speculators could be associated with the US-China trade truce and the recently announced OPEC output cuts. 

Technical levels