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Oil prices stable as talk of OPEC output cuts supports, but soaring US production drags

Reuters  |  SINGAPORE 

By Gloystein

(Reuters) - prices were stable on Thursday, supported by rumblings from within OPEC that production curbs may become necessary again to prevent a return of global oversupply.

But soaring U.S. crude output, which hit a record 11.6 million barrels per day (bpd) last week, kept a lid on prices.

U.S. Intermediate (WTI) futures were at $61.75 per barrel at 0120 GMT, up 8 cents from their last settlement.

Front-month Brent futures were up 6 cents at $72.13 a barrel.

A group of producers around the Middle East-dominated (OPEC) as well as decided last June to relax output curbs in place since 2017, after pressure from U.S. to reduce and make up for supply losses from

But with sanctions now in place and oil still in ample availability, OPEC-led production cuts next year cannot be ruled out, two OPEC sources said on Wednesday.

"OPEC and may use cuts to support $70 per barrel," said Ole Hansen, at

"The introduction of U.S. sanctions earlier this week against failed to lift the market given the announcement that eight countries, including three of the world's biggest importers, would receive waivers to carry on buying Iranian crude for up to six months," Hansen said.

THE ONLY WAY IS UP

Preventing from rising any further has been a relentless rise in U.S. crude output , which hit a record 11.6 million bpd in the week ending Nov. 2, according to (EIA) data released on Wednesday.

That's a threefold increase from the U.S. low reached a decade ago, and a 22.2 percent rise just this year. It makes the the world's biggest of

That has impacted U.S. crude inventories , which rose by 5.8 million barrels in the week ending Nov. 2, to 431.79 million barrels, the EIA said.

Crude stocks moved back above their five-year average levels in October.

Production has not just risen in the United States, but also in many other countries, including Russia, Saudi Arabia, and Brazil, stoking concerns of a return of oversupply that depressed between 2014 and 2017.

"Producers are concerned about the potential oversupply ... after EIA reported that crude inventories rose by 5.8 million barrels," said Stephen Innes, at in

(Reporting by Gloystein; Editing by Joseph Radford)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, November 08 2018. 07:01 IST
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