The price of Brent crude steadied around $86 a barrel today on news of a cut in oil production from Saudi Arabia and Kuwait.
Reuters reported that Brent declined ten cents to $86.06 and US crude increased 20 cents to $82.95 a barrel.
Production has been temporarily stopped at the Saudi-Kuwait Khafji oilfield, which produces 280,000bpd to 300,000bpd, due to environmental factors.
The news will not affect oil supplies from Saudi Arabia, which has significant surplus capacity.
Market traders consider this a positive development, coming at a time when crude oil output far exceeds demand.
Last week, the price of Brent fell to its lowest level since 2010 due to abundant oil supplies and a weak economic outlook from Europe and China.
The Organization of the Petroleum Exporting Countries (OPEC), which produces around 40% of the world’s total crude oil, is due to meet next month in Vienna, Austria, to discuss its production targets.
Iran, Saudi Arabia and Kuwait have all played down talks of any reduction in oil output.
Meanwhile, the market is concerned by uncertainty over who is in charge of Libya’s vast oil reserves, following a self-styled government in control of Tripoli announcing a new oil policy.
Libya is currently producing 800,000bpd of oil, down more than 40% from its peak of 1.4 million barrels per day in mid-2013.
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