Oil prices stable on hopes of possible output cut extension
Oil prices have remained mostly stable amid expectations that prominent oil producing countries Saudi Arabia and Russia can extend the ongoing production cut deal.
Brent crude futures LCOc1 gained 3 cents to touch $55.83 per barrel, while the US West Texas Intermediate (WTI) crude futures CLc1 dropped 3 cents at $49.95, reported Reuters.
Russia President Vladimir Putin stated that the current agreement to reduce oil production by 1.8 million barrels per day pledged by the Organization of the Petroleum Exporting Countries (OPEC) and other producers can be extended until the end of next year.
The announcement was made just before Saudi ruler King Salman’s visit to Russia.
The output cut deal started in January and is scheduled to end in March next year.
However, gains in the oil market have been restricted by the resuming of production at Libya’s Sharara oilfield, as well as the improvement of US crude exports.
The US Energy Information Administration (EIA) stated that crude oil exports increased to 1.98 million bpd last week from the previous week’s level of 1.5 million bpd exports.
The substantial increase has been primarily attributed to the large discounts on the US WTI prices against international Brent crude making the US oil attractive for the traders.
In another development, Barclays bank stated that the oil demand can be significantly affected due to the increase in fuel efficiency and the increasing usage of electric vehicles.