Oil prices were little changed on Tuesday as the impact from expectations of an extended OPEC-led production cut was cancelled out by rising output in the United States.
Brent crude futures, the
international benchmark for oil prices, were at $62.20 per barrel at
03:01 GMT, 8 cents above their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $56.50 a barrel, also up 8 cent from their last settlement.
Traders said they were avoiding taking on large new positions due to uncertainty in markets.
Organization of the Petroleum Exporting Countries (OPEC), together with
a group of non-OPEC producers led by Russia, has been restraining
output since the start of this year in a bid to end a global supply
overhang and buoy prices.
The deal to curb output is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss the outlook for the policy.
is expected to agree to extend cuts as storage levels remain high
despite recent drawdowns, although there are doubts about the
willingness of some participants to continue to restrict their
"If the OPEC/non-OPEC cuts continue, the stocks
surplus will reduce to just some 50 million barrels above the 5-year
average in 3Q 2018 (down from 140 million barrels above that average
now) and prices will hit $65-70 per barrel," energy consultancy FGE said
Outside the group of producers voluntarily
withholding output, the biggest headaches for OPEC has been rising U.S.
drilling activity, led by shale oil producers.
Westwood Global Energy Group said U.S. output would climb even faster
than implied by the rising rig count, which has jumped from 316 rigs in
mid-2016 to 738 last week, as producers get more productive per well.
Global Energy forecasts an 18 percent increase in active rigs in 2018,
but more rapid demand growth in certain service areas as operators focus
on efficiency and delivering more for less," the consultancy said.
2018, FGE warned potential supply disruptions during an already tighter
market could trigger oil price spikes, but it added that the market
could slump again towards 2019 as U.S. output continues to soar and OPEC
and its allies at some point will stop withholding output.
see another big rush with (U.S.) production growth of some 1-1.5 million
bpd in 2018 and 2019," FGE said. It added that OPEC also "has some 1.5
million bpd of spare capacity (while) Russia and Kazakhstan could also
add another 500,000 bpd."