Oil steady as expected output curbs balance U.S. supply

By Christopher Johnson

LONDON (Reuters) – Oil markets stabilized on Thursday as expectations that OPEC would extend production limits balanced rising production and inventories.

Brent crude oil () was up 20 cents a barrel at $62.07 by 0830 GMT. U.S. light crude was 10 cents higher at $55.43 a barrel.

Global oil markets are looking ahead to a meeting of the Organization of the Petroleum Exporting Countries in Vienna on Nov. 30 which is expected to decide to extend limits on crude production to help tighten supply.

OPEC and other big producers including Russia agreed a year ago to cut crude output by 1.8 million barrels per day (bpd) to try to bolster prices.

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.

“OPEC, led by Saudi … will look to support the market,” said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers.

Oil prices have risen steadily over the last few months as the impact of supply cuts has drained inventories. Both crude benchmarks hit two-year highs last week.

Prices have slipped back in recent days, partly due to evidence that supply from the United States is rising fast, hampering OPEC’s efforts to tighten the market.

On Wednesday, the U.S. government’s Energy Information Administration (EIA) said domestic crude inventories rose for a second week in a row, building by 1.9 million barrels in the week to Nov. 10 to 459 million barrels.

Analysts in a Reuters poll had expected a decrease of 2.2 million barrels.

U.S. crude oil production has hit a record of 9.65 million barrels per day (bpd), meaning output has risen by almost 15 percent since their most recent low in mid-2016.

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