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Brent crude oil LCOc1 was down 60 cents at $56.34 a barrel by 1055 GMT. U.S. light crude CLc1 was 75 cents lower at $50.55. Both benchmarks have risen more than 20 percent from their lows in June as world oil markets tightened.
The Organization of the Petroleum Exporting Countries and other producers including Russia agreed last year to reduce output by 1.8 million barrels per day (bpd) to prop up prices and the cuts, from January, have helped drain inventories.
The OPEC-led deal helped lift oil from the $30 to $40 per barrel range in late 2016/early 2017. But traders say supplies remain ample despite these cuts, thanks in large part to surging U.S. production C-OUT-T-EIA.
Higher U.S. production is allowing U.S. companies to export increasing volumes to world markets, feeding inventories and helping to undermine OPEC’s efforts to tighten the market.
U.S. crude stocks rose by 3.1 million to 468.5 million barrels last week, according to the American Petroleum Institute.
Official U.S. fuel inventory data is due to be published on Thursday by the Energy Information Administration.
OPEC is widely expected to extend its cuts beyond the current expiry date of end-March 2018.
“There is little doubt that leading producers have re-committed to do whatever it takes to underpin the market,” the International Energy Agency said in a report on Thursday.
“For next year, the crude and product markets look broadly balanced, assuming OPEC holds output steady at around current levels,” the IEA added.
Many analysts expect Brent to stay between $50 and $60 a barrel as long as global markets stay balanced.
“Our updated global supply-demand balance ... shows peak stock draws in 3Q17,” Goldman Sachs said in a note to clients.
The U.S. bank said oil supply and demand fundamentals meant it expected Brent to average $58 a barrel in 2018.
But risks remain, including the possibility of tension in the Middle East.
U.S. President Donald Trump is threatening to impose sanctions on Iran less than two years after they were lifted under a 2015 deal between Tehran and leading world powers following Iran’s agreement to suspend its nuclear program.
In Venezuela, an OPEC member with huge oil reserves, an economic and political crisis is also threatening production.
Oil prices were mixed on Thursday as the market struggled to digest signs of strong gasoline demand in the US, the world’s biggest consumer of the fuel, with a statement from oil producers that they
Oil traded below $68 (Dh249) as investors weighed the prospect of shrinking US inventories against more supply from Saudi Arabia and America’s emergency hoard.
Futures in New York declined
The price of Kuwaiti oil went up 74 cents Monday to $71.79 per barrel (pb), after being at $71.05 pb Friday, said Kuwait Petroleum Corporation (KPC) on Tuesday. On the global scale, the oil price fal
Oil retreated below $70 (Dh257) a barrel as Saudi Arabia was said to offer extra crude to some customers, while the US was said to consider tapping emergency supplies to offset losses elsewhere.
To bring the oil prices down to an acceptable “White House” level, which is less than $80 per barrel, the USA administration must ensure all oil-producing countries including OPEC member states conti