Oil Edges Up To Near 2-Year Highs As Market Tightens
NEW YORK, Nov 2 (Reuters) - Oil prices edged up on Thursday, steadying near two-year highs as the outlook remained upbeat as OPEC-led supply cuts have tightened the market and drained inventories.
Brent crude settled up 13 cents, or 0.2 percent, at $60.62 per barrel. The benchmark hit $61.70 on Wednesday, its highest intraday level since July 2015. The contract is up by more than a third from its 2017-lows in June.
U.S. crude ended 24 cents, or 0.4 percent, higher at $54.54, almost 30 percent above its 2017-lows in June.
Confidence has been fueled by an effort this year lead by the Organization of the Petroleum Exporting Countries and Russia to hold back about 1.8 million barrels per day (bpd) in oil production to tighten markets.
Saudi Arabian Energy Minister Khalid al-Falih said supply and demand balances were tightening and oil inventories falling, while compliance with the OPEC-led pact to curb supplies had been "excellent".
"Compliance as a whole for OPEC up being rather strong," said Mark Watkins, regional investment manager at U.S. Bank. "Now that we've flipped the calendar to November we have the OPEC meeting at the end of the month. There's expectation that there will be positive comments about extending the cuts past March."
The pact to withhold supplies runs to March 2018, but there is growing consensus to extend the deal to cover all of next year.
Iraq's oil minister said that OPEC's second-largest producer supports keeping curbs on global oil supply to bolster prices, adding $60 per barrel would be an acceptable target price for his country.
The energy ministers of Russia and Saudi Arabia, the world's top oil producers, were expected to travel to Tashkent, Uzbekistan, on Thursday night, two sources told Reuters. Both said the ministers were expected to give a briefing.
Oil was also supported by falling U.S. commercial crude inventories despite rising output.
U.S. crude oil inventories fell 2.4 million barrels last week despite a 46,000 bpd increase in production to 9.55 million bpd.
Goldman Sachs said it expected year-on-year U.S. oil production growth of 0.8 million to 0.9 million bpd at year-end 2017. That would put end-2017 output at 9.6-9.7 million bpd, close to its highest for at least three decades.
Traders said this was due to U.S. crude trading at a wide discount to Brent, making exports attractive. <CL-LCO1=R>
U.S. independent oil producer Pioneer Natural Resources said it expected to export 2.3 million barrels of oil in the fourth quarter.
(Additional reporting by Christopher Johnson in London, Henning Gloystein in Singapore; Editing by Jason Neely and Andrew Hay)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Gunvor CEO Sees Russian Refining Capacity Taking Hit from Drone Strikes
- These Factors Helped Brent Oil Price Break Above $85
- Sinopec Engineering Posts Higher Annual Petrochemicals Revenue
- Imperial Pipeline in Winnipeg Goes Offline for Three Months
- Gaz System to Acquire Gas Storage Poland
- Subsea7 Secures Contract to Service Woodside's Trion
- Adnoc Inks Supply Deal for Ruwais LNG Project with Germany's SEFE
- TotalEnergies to Acquire TLCS Eyeing Bayou Bend CCS Project
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension