LONDON: Oil markets had stabilised on Thursday as expectations that OPEC would extend the production cutback has proved to be a counterweight to rising US crude production and the damning International Energy Agency report on the oil markets, says Mihir Kapadia, CEO and Founder of Sun Global Investments.
“The oil prices steady as expected output curbs balance US supply. Brent crude oil LCOc1 was up 20 cents a barrel at $62.07 by 0830 GMT, while U.S. light crude was 10 cents higher at $55.43 a barrel,” he added.
“The next big milestone for the oil markets would be the OPEC meeting in Vienna on November 30, when the member countries and partners are expected to extend the production cutback to help tighten the supply. The corrective action by OPEC this year proved to be the pivotal leverage to push the prices northward, and has helped create a sense of order and discipline in the oil markets since.”
“While there have been price improvements, the lack of discipline from a few impatient members have in the past jeopardised the efforts with the market flooding. Prices have also 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,” he said.