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Oil prices dip on record U.S. crude exports, but OPEC-led supply cuts support

Reuters  |  SINGAPORE 

By Henning Gloystein

(Reuters) - prices dipped on Thursday after the United States reported record crude exports, although traders said that efforts led by OPEC and to cut production meant markets remained well supported overall.

U.S. West Texas Intermediate (WTI) crude futures were trading at $49.90 per barrel at 0015 GMT, down 8 cents, or 0.16 percent, from their last close.

Brent crude futures , the international benchmark for prices, were down 5 cents, or 0.1 percent, at $55.75 a barrel.

The declines came after the Energy Information Administration (EIA) said late on Wednesday that U.S. crude jumped to 1.98 million barrels per day (bpd) last week, surpassing the 1.5 million bpd record set the previous week.

The increase has been triggered by the wide spread between U.S. WTI and international Brent crude prices, which makes U.S. attractive.

Some traders said this was also an indicator that markets remained amply supplied despite efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and to cut output to tighten the market and prop up prices.

Ole Hansen, head of commodity strategy at Denmark's Saxo Bank said it was "still too early" for markets to expect crude prices to see a sustained period above $60 per barrel.

But analysts said that prices were unlikely to fall much further.

"prices remain supported by ongoing supply restrictions from the OPEC and Russia, with the agreement likely to be extended ... Any weakness in prices are thus likely to be short-lived," said Fawad Razaqzada, market analyst at futures brokerage

Russian President Vladimir Putin said on Wednesday during an industry event in Moscow that the pledge between OPEC and other producers including to cut output could be extended to the end of 2018, instead of expiring in March 2018.

The pact between OPEC and other producers, which excludes the United States, on cutting output by about 1.8 million bpd took effect in January this year.

(Reporting by Henning Gloystein; Editing by Joseph Radford)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, October 05 2017. 06:05 IST