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Crude Oil Prices Supported by Hopes of Extended Output Cuts

Published 05/10/2017, 08:50
Updated 05/10/2017, 08:53
© Reuters.  Crude prices benefit from supply cut extension hopes
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Investing.com - Crude oil prices were steady to higher on Thursday, following news of a far larger-than-expected decline in U.S. stockpiles and the potential extension of output cuts by the Organization of Petroleum Exporting Countries.

The U.S. West Texas Intermediate crude November contract was steady at $49.99 a barrel by 3:50 a.m. ET (07:50 GMT), its lowest since September 20.

Prices were initially boosted after the U.S. Energy Information Administration reported on Wednesday that crude oil inventories fell by 6.023 million barrels in the week ended September 29, compared to expectations for a decline of around 756,000 barrels.

However, traders were disappointed to learn that U.S. crude oil exports jumped to 1.98 million bpd last week, surpassing the 1.5 million bpd record set the previous week.

Elsewhere, Brent oil for November delivery on the ICE Futures Exchange in London was up 17 cents or about 0.30% at $55.97 a barrel, off the previous session's two-week lows of $55.39.

The commodity benefitted from comments by Russian President Vladimir Putin on Wednesday saying that a pledge by OPEC and other producers, including Russia, to cut oil output to boost prices could be extended to the end of 2018, instead of expiring in March 2018.

Oil prices have been well supported in recent weeks amid growing optimism that the crude market was well on its way towards rebalancing as data showed strong compliance from major producers with their supply cut agreement.

In May, OPEC and non-OPEC members led by Russia agreed to extend production cuts of 1.8 million barrels per day for a period of nine months until March 2018 in a bid to reduce global oil inventories and support oil prices.

Elsewhere, gasoline futures advanced 0.53% to $1.590 a gallon, while natural gas futures edged up 0.14% to $2.944 per million British thermal units.

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