Oil rises as expected extension of OPEC cuts counters rising United States supplies

EIA forecasts Brent-WTI price spread narrowing to $4 per barrel in 2018

United States light crude fell 7 United States cents to US$55.26.

"To compete with Brent in Asia, WTI prices must reflect the additional transportation costs US crude oil exports incur on their way to Asia", EIA reported.

While speaking at the Abu Dhabi International Petroleum Exhibition Conference (ADIPEC), the Secretary-General, Organisation of Petroleum Exporting Countries (OPEC), Mohammed Barkindo said countries did not have to worry about oil reaching its peak demand until 2040.

As of 16:02 GMT, West Texas Intermediate crude oil futures were 1% lower at $55.17 a barrel on the ICE.

Oil markets stabilized on Thursday as expectations that OPEC would extend production limits balanced rising US crude production and inventories.

The energy policy adviser to developed nations knocked down its growth forecast by 100,000 barrels a day for each year, projecting that oil markets will remain oversupplied in the first half of 2018.

That deal is due to expire at the end of March 2018 but ministers have signaled that they are likely to extend the agreement, possibly until the end of next year. "Brent would break back below US$60 a barrel".

Oil prices have risen steadily over the past few months as the impact of supply cuts has drained inventories.

The benchmarks have dipped from earlier in the month, when a surfeit of buying from funds, bolstered by expected strength in demand and momentum from the ongoing rally, boosted prices to two-year highs.

At the time of writing, WTI was trading at US$55.08 a barrel and Brent crude was at US$61.52, both down by more than a percent since close yesterday.

On Wednesday, the USA government's Energy Information Administration (EIA) said domestic crude inventories C-STK-T-EIA rose for a second week in a row, building by 1.9 million barrels in the week to November 10 to 459 million barrels.

That compared with analyst expectations in a Reuters poll for a decrease of 2.2-million barrels.

Related:

Comments

Latest news

Wisma Putra confirms 6 Malaysians injured in Singapore's train collision
Several passengers were flung against panels and steel railings inside the train, while others were piled on top of one another. It is not the only fault made by Singapore's MRT system on Wednesday morning that caused train delays and commuter frustration.

Private collectors can't get their hands on this Da Vinci work
The 500-year-old painting, which depicts Jesus Christ , was sold after a 19-minute bidding war, which started at AUD $130 million. Louis XII of France first commissioned the painting and Charles I of England later owned the piece.

Amazon launches Alexa, Prime Music, and trio of Echo devices in Canada
The Canadian Alexa voice will exactly be the same as that of the local language of the nation. Amazon launched its Alexa virtual assistant and smart device platform in Canada today.

2 women sue Uber, allege sexual assault by drivers
The suit also takes issue with Uber's marketing of ride-hailing as safe transportation for people who have been drinking. He was arrested and charged with two counts of sexual battery, and Uber refunded her $9.51 for the ride.

Other news