NEW YORK (Reuters) – Oil prices steadied on Tuesday, supported by expectations that crude exporters would agree to cut output at an OPEC meeting next week, but weighed down by signs of increased global production.
FILE PHOTO: Oil tankers wait to dock at Tupras refinery near the northwestern Turkish city of Izmit, Turkey, June 28, 2017. REUTERS/Umit Bektas/File Photo
Traders also said any upside was being capped ahead of a meeting of leaders of the Group of 20 nations (G20), the world’s biggest economies, 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 United States and Saudi Arabia – all present, oil policy is expected to be discussed.
Brent crude LCOc1 futures rose 21 cents to $60.69 a barrel by 11:21 a.m. EST (1621 GMT). U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 10 cents to $51.73 a barrel.
Prices fell to their lowest since October 2017 last week – Brent at $58.41 and WTI dropped at $50.15.
Both benchmarks are down by more than 30 percent since early October, depressed by an emerging supply overhang and widespread financial market weakness due to concern about slowing economic growth.
“Right now it seems we’ve absorbed a lot of selling pressure and we’re just catching our breath,” said Gene McGillian, director of energy research at Tradition Energy in Stamford, Connecticut.
GRAPHIC: Brent crude oil price slumps of 2008, 2014/2015 & 2018 in percent – tmsnrt.rs/2RiWkJ1
The Organization of the Petroleum Exporting Countries will meet on Dec. 6 in Vienna to discuss output policy with some non-OPEC producers, including Russia.
Saudi Arabia raised oil production to a record high in November, an industry source said on Monday, pumping 11.1 million to 11.3 million barrels per day (bpd).
But the kingdom has been pushing for a collective production cut and is discussing a proposal to curb output by as much as 1.4 million bpd by OPEC and its allies, sources close to the discussions told Reuters earlier this month.
U.S. President Donald Trump has put pressure on Saudi Arabia, OPEC’s de-facto leader, not to cut production.
“We feel that the Saudis will attempt to try to tread a fine line between placating Trump and driving some production decisions capable of halting the dramatic price plunge of the past couple of months,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
U.S. crude production C-OUT-T-EIA also hit a record high this month of 11.7 million bpd, with stockpiles rising for nine straight weeks.
Weekly industry data on U.S. crude inventories is set to be released at 4:30 p.m. EST on Tuesday, with analysts expecting stockpiles to have fallen about 600,000 barrels last week.
GRAPHIC: Russian, U.S. & Saudi crude oil production – tmsnrt.rs/2CTwqaq
Reporting by Stephanie Kelly in New York, Chistopher Johnson in London, Henning Gloystein in Singapore; Editing by Marguerita Choy and Louise Heavens