Oil prices weighed down by rising US supplies, but OPEC cuts prevent falls
Oil markets on Thursday were weighed down by rising U.S. crude production and inventories, but prices were prevented from falling by expectations that OPEC will extend an ongoing production cut during a meeting at the end of this month.
Brent crude futures , the international benchmark for oil prices, were at $61.89 per barrel at 0100 GMT, 2 cents above their last close.
Both crude benchmarks have lost almost 5 percent in value since hitting 2015 highs last week
U.S. crude inventories rose for a second week in a row, building by 1.9 million barrels in the week to Nov. 10 to 459 million barrels, the government’s Energy Information Administration (EIA) said on Wednesday.
That compared to analyst expectations in a Reuters poll for a decrease of 2.2 million barrels.
U.S. crude oil production hit a record of 9.65 million barrels per day (bpd), meaning output has risen by almost 15 percent since their most recent low in mid-2016.
Despite this, analysts said prices were relatively well supported, largely due to efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to withhold oil production in order to tighten the market and prop up prices.
“OPEC, led by Saudi … will look to support the market, especially until the sale of Aramco is complete. If sanctions against Iran are executed, it will drive the price significantly higher,” said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers in Sydney.