Crude Oil Prices Mixed on OPEC Hopes Vs. Output Worries

Investing.com – Crude oil prices were mixed on Tuesday, as the decision last week by global oil producers to continuu limiting production lent support to the commodity, while sustained worries over U.S. production levels weighed.

The U.S. West Texas Intermediate January contract was little changed at $57.44 a barrel by 09:50 a.m. ET (13:50 GMT).

Elsewhere, for February delivery on the ICE Futures Exchange in London was up 12 cents or about 0.19% at $62.56 a barrel.

Prices were pressured lower by worries rising U.S. shale output could dampen the Organization of Petroleum Exporting Countries’ efforts to rid the market of excess supplies.

Recent data showed that U.S. energy companies added two oil rigs in the week to Dec. 1, bringing the total count up to 749, the highest since September.

Domestic U.S. output has rebounded by almost 15% since the most recent low in mid-2016, and increasing drilling activity for new production means output is expected to grow further, as producers are attracted by climbing prices.

Market participants were looking ahead to the American Petroleum Institute’s due later Tuesday at 4:30 p.m. ET (21:30 GMT).

Crude had climbed after OPEC, along with some non-OPEC producers led by Russia, for a further nine months until the end of 2018. They also signaled a possible early exit from the deal should the market overheat and prices rise too far.

The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

The OPEC-led production cuts have been one of the key catalyst supporting the recent rally in oil prices amid expectations that rebalancing in crude markets are well underway.

However, fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies are prevented prices from rising much further, according to market participants.

Elsewhere, were up 0.55% at $1.898 a gallon, while lost 2.24% to $2.917 per million British thermal units.

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