Crude Prices Settle Higher Ahead of Inventory Data

Investing.com – Crude oil prices settled higher on Tuesday as traders weighed the prospect of an extension to the production-cut agreement against expectations of higher US output.

On the New York Mercantile Exchange for December delivery rose by 41 cents to settle at $56.83 a barrel, while on London’s Intercontinental Exchange, rose 37 cents to trade at $62.59 a barrel.

Oil prices pared some of Monday’s losses to settle higher amid expectations that the Organization of the Petroleum Exporting Countries (OPEC) will agree to extend output curbs beyond the March 2018 deadline at its upcoming meeting on Nov 30.

In May, Opec producers agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.2 million bpd agreed in November last year.

Some market participants, however, remained uncertain whether Russia will agree to extend output cuts for a prolonged period amid fears that major oil producers who are not part of the pact will ramp up output to gain market share.

Data last week showed U.S. oil producers – not part of the production-cut agreement – ramped up output to record levels, fuelling fears that rising US output will continue to undermine OPEC’s efforts to rebalance oil markets.

“… persistently high oil production in the United States will be the predominant bearish factor limiting gains in oil prices,” said Abhishek Kumar, Senior Energy Analyst at Interfax Energy’s Global Gas Analytics in London.

Analysts expect data from the American Petroleum Institute on Tuesday as well as a further report from EIA on Wednesday to show a for the third straight week.

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