Oil stable as OPEC-led supply cuts tighten market

Oil prices were stable on Tuesday, supported by a tightening market due to ongoing OPEC-led efforts to cut supplies, although the prospect of rising US shale output dragged.

Brent crude futures, the international benchmark for oil prices, were at $60.84 per barrel at 0027 GMT.

That was slightly below their last settlement, but close to the highest level since July 2015 and up some 36 percent since their 2017-lows last June, reports Reuters.

US West Texas Intermediate (WTI) crude futures were at $54.04 a barrel, 11 cents below their last close but near their highest level since February and up around 28 per cent since 2017-lows in June.

The pact runs to March 2018, but Saudi Arabia and Russia have voiced support to extend the agreement.

OPEC is scheduled to meet officially at its headquarters in Vienna, Austria, on Nov 30.

Despite the upbeat market sentiment, some analysts were cautious.

WTI’s $6.8 per barrel discount to Brent CL-LCO1=R is a result of rising American crude production C-OUT-T-EIA, which is up almost 13 per cent since mid-2016 to 9.5 million barrels per day (bpd), making US crude exports highly profitable.

Also, not everybody within OPEC is withholding output with the discipline of the Saudis.

Iraq has increased exports from its southern oilfields to 3.45 million barrels per day (bpd) to make up for a shortfall from the northern Kirkuk fields, Basra Oil Company Director General Ihsan Abdul Jabbar told Reuters on Monday. Exports from Basra had previously averaged 3.23 million bpd.