LONDON: Oil prices steadied on Tuesday, depressed by record Saudi production but supported by expectations that oil exporters would agree to cut output at an OPEC meeting next week.
Brent crude oil was up 10 cents a barrel at $60.58 by 2.45 p.m., not far above a 13-month low of $58.41 reached on Friday. US light crude was up 10 cents at $51.73.
Oil prices are down by almost a third since early October, weighed down by an emerging supply overhang and widespread financial market weakness.
Prices rallied sharply on Monday, with Brent rising almost 2.9 percent, but the market has struggled to stay positive.
“The energy complex is making a half-hearted attempt to extend gains,” said Stephen Brennock, an analyst at London brokerage PVM Oil.
“However, upside potential is being capped by two upcoming risk events, namely the G20 summit and next week’s OPEC meeting.
“A wait-and-see approach is therefore likely to prevail, which in turn will act as a damper on any looming price swings.”
Leaders of the Group of 20 nations (G20), the world’s biggest economies, will meet on Nov. 30 and Dec. 1, with the trade war between Washington and Beijing top of the agenda. With the top three crude producers — Russia, the US and Saudi Arabia — all present, oil policy is expected to be discussed.
OPEC meets in Vienna on Dec. 6 to discuss output policy together with some non-OPEC producers, including Russia.
Fereidun Fesharaki, chairman of energy consultancy FGE, said that a failure by OPEC and Russia to cut supply significantly would mean crude prices would “fall further, perhaps (with) Brent at $50 per barrel and WTI of $40 per barrel or less”.