Oil prices remain steady as Middle East producers confirm supply cuts
Oil prices have remained steady amid evidence that customers were informed by Middle East producers of upcoming supply cuts to combat global oversupply concerns.
Brent crude futures were flat from last settlement and traded at $54.02 per barrel, while the US West Texas Intermediate (WTI) crude fell 2 cents at $50.88, Reuters reported.
Any production cuts are expected to hit markets during early next year, with Iraq still increasing sales to Asia.
Iraq has signed new agreements that will increase its sales to customers such as China and India despite its commitment to reduce output by 210,000bpd.
Goldman Sachs analysts said that the price upside for this month was limited due to these reasons.
Middle East oil producers including Kuwait, Saudi Arabia, and Abu Dhabi, members of the Organization of the Petroleum Exporting Countries (OPEC), have notified customers that supplies would be reduced beginning January next year, in a bid to increase oil prices.
As part of the agreement, production is set to fall by almost 1.8 million bpd.
US investment bank Jefferies was quoted by the news agency as saying: "The decision by a group of 11 non-OPEC producers to join OPEC in production cuts has likely put a floor on Brent oil prices in the low $50s until such time as adherence to the cuts can be assessed."
However, there are still doubts as to whether other OPEC members will comply with the output freeze proposal.