LONDON: Oil prices erased earlier gains on Thursday, as the International Energy Agency (IEA) pointed to the “daunting” task of balancing the market next year amid surging US supply and no movement toward deeper output cuts by OPEC and its allies.
Brent crude futures LCOc1 fell 50 cents to $60.31 a barrel by 09:34 GMT, heading for a third session of losses. US West Texas Intermediate futures CLc1 were down 31 cents at $55.44.
Both benchmarks fell sharply the previous day following a report that US President Donald Trump had weighed easing sanctions on Iran, a move that would potentially boost global crude supply.
The new Saudi energy minister, Prince Abdulaziz bin Salman, said any discussion on deeper cuts would be left for the next OPEC meeting.
Supporting prices earlier in Thursday’s session, China and the United States made some concessions in a protracted trade war, which has weighed on oil demand forecasts, ahead of a planned meeting in coming days.
“The risk to the downside is currently muted and only a significant thawing in the US-Iranian relationship would change it,” PVM oil analyst Tamas Varga said.
Also giving a floor to prices, the US Energy Information Administration said on Wednesday that US crude oil stockpiles fell last week to their lowest in nearly a year, as refineries raised output and imports fell.
Crude inventories fell for a fourth week, decreasing by 6.9 million barrels in the week to September 6 — more than double analysts’ expectations.
At 416.1 million barrels, US crude inventories were at their lowest since October 2018, the IEA said. — Reuters
Oman Observer is now on the WhatsApp channel. Click here
