Oil prices stabilise just below two-year highs

LONDON: Oil prices steadied just below two-year highs on Thursday, supported by supply cuts by OPEC and other major exporters including Russia. Benchmark Brent crude oil LCOc1 was unchanged at $63.49 a barrel by 08:40 GMT. On Tuesday, Brent reached an intra-day high of $64.65, its highest since June 2015.
US light crude CLc1 was steady at $56.81, not too far off this week’s more than two-year high of $57.69 a barrel.
Traders said a rally that has pushed up Brent by more than 40 per cent since July may have run its course due to increases in US supplies and some indicators of a demand slowdown.
“Prices may have reached a short-term peak,” said Fawad Razaqzada, analyst at futures brokerage Forex.com.
Prices are still supported by efforts led by the Organization of the Petroleum Exporting Countries and Russia to withhold supplies in order to tighten the market and prop up prices.
OPEC will discuss output during a meeting on November 30, and is expected to extend the limits beyond their expiry in March 2018.
“With the OPEC/non-OPEC deal extension beyond March 2018 a certainty, prices may become stronger and temporarily reach the $65-$70 per barrel range in 2018,” said energy consultancy FGE.
Despite this, many analysts say the price rally of the past months may have run its course, at least for now.
US crude stockpiles rose 2.2 million barrels in the week to November 3, to 457.14 million barrels, the Energy Information Administration said on Wednesday, contrary to analysts’ expectations for a decrease of 2.9 million barrels. US crude production inched up 67,000 barrels per day (bpd) to 9.62 million bpd, the highest on record.
Output looks set to rise further. Texas issued 997 oil and gas drilling permits last month, up nearly 17 per cent versus the same month a year ago, the state’s energy regulator said on Wednesday. — Reuters