LONDON: Oil prices steadied on Thursday after two days of increases as bloated US inventories limited the impact of supply disruptions in Libya and lower supply from other OPEC exporters.
Brent crude oil was unchanged at $52.42 a barrel by 0825 GMT. US light crude oil was up 5 cents at $49.56.
Both benchmark crude contracts rose more than $1 a barrel on Wednesday to their highest levels for two weeks, rallying back from four-month lows.
“There is a significant chance that a short- to medium-term bottom has been found,” said Tamas Varga, analyst at London brokerage PVM Oil Associates.
Oil production in Libya has fallen more than 250,000 barrels per day (bpd) this week as output from its western oil fields of Sharara and Wafa has been blocked by armed protesters.
The reduction in Libyan oil output has coincided with attempts by the Organization of the Petroleum Exporting Countries (OPEC) to tighten supply to support prices.
A Reuters survey showed OPEC oil output has fallen for a third straight month in March as members of the group aim to trim 1.2 million bpd during the first six months of this year under a deal signed in November.
The survey found OPEC members have now complied with 95 percent of their commitments under the deal. But OPEC is finding it hard to tighten the oil market because inventories in many parts of the world are at or near record highs.
March’s biggest reduction came from the UAE, which was slower than Kuwait and Saudi Arabia to trim supply. Output is lower this month because more cuts have been implemented and due to planned maintenance, industry sources say.
After limited reductions earlier in 2017, UAE officials and industry sources have said the country would improve average compliance during the six-month duration of the supply cut.
The Reuters survey showed Saudi Arabia’s output rose slightly in March from a large reduction in February. Even with March’s increase, the total curb achieved is 564,000 bpd, well above the target cut of 486,000 bpd.
As a result, Saudi Arabia, Kuwait and as of this month, the UAE, compensated for the weaker adherence of other members, including Algeria, Ecuador, Gabon and Venezuela.
Iraq has boosted compliance too, the survey found, with exports from northern and southern ports falling. A supertanker collided with a berth at Basra oil terminal in late March, although this did not affect shipments significantly.
US crude stocks rose 867,000 barrels to a record of nearly 534 million barrels last week, the Energy Information Administration (EIA) said on Wednesday.
Investors are waiting to see if OPEC decides to extend its production curbs into the second half of the year and whether adherence to the deal remains so high.
Other oil exporters outside OPEC, including Russia, have also promised to cut production but so far those reductions have been limited. Russia has promised to cut output by 300,000 bpd.
“It is highly unlikely Russia will achieve an absolute 300,000 bpd reduction during the tenure of the current agreement,” Eurasia Group said in a research report.
Brent crude oil was unchanged at $52.42 a barrel by 0825 GMT. US light crude oil was up 5 cents at $49.56.
Both benchmark crude contracts rose more than $1 a barrel on Wednesday to their highest levels for two weeks, rallying back from four-month lows.
“There is a significant chance that a short- to medium-term bottom has been found,” said Tamas Varga, analyst at London brokerage PVM Oil Associates.
Oil production in Libya has fallen more than 250,000 barrels per day (bpd) this week as output from its western oil fields of Sharara and Wafa has been blocked by armed protesters.
The reduction in Libyan oil output has coincided with attempts by the Organization of the Petroleum Exporting Countries (OPEC) to tighten supply to support prices.
A Reuters survey showed OPEC oil output has fallen for a third straight month in March as members of the group aim to trim 1.2 million bpd during the first six months of this year under a deal signed in November.
The survey found OPEC members have now complied with 95 percent of their commitments under the deal. But OPEC is finding it hard to tighten the oil market because inventories in many parts of the world are at or near record highs.
March’s biggest reduction came from the UAE, which was slower than Kuwait and Saudi Arabia to trim supply. Output is lower this month because more cuts have been implemented and due to planned maintenance, industry sources say.
After limited reductions earlier in 2017, UAE officials and industry sources have said the country would improve average compliance during the six-month duration of the supply cut.
The Reuters survey showed Saudi Arabia’s output rose slightly in March from a large reduction in February. Even with March’s increase, the total curb achieved is 564,000 bpd, well above the target cut of 486,000 bpd.
As a result, Saudi Arabia, Kuwait and as of this month, the UAE, compensated for the weaker adherence of other members, including Algeria, Ecuador, Gabon and Venezuela.
Iraq has boosted compliance too, the survey found, with exports from northern and southern ports falling. A supertanker collided with a berth at Basra oil terminal in late March, although this did not affect shipments significantly.
US crude stocks rose 867,000 barrels to a record of nearly 534 million barrels last week, the Energy Information Administration (EIA) said on Wednesday.
Investors are waiting to see if OPEC decides to extend its production curbs into the second half of the year and whether adherence to the deal remains so high.
Other oil exporters outside OPEC, including Russia, have also promised to cut production but so far those reductions have been limited. Russia has promised to cut output by 300,000 bpd.
“It is highly unlikely Russia will achieve an absolute 300,000 bpd reduction during the tenure of the current agreement,” Eurasia Group said in a research report.
