2017.11.2103:01:00UTC+00Oil Prices Stable as Increasing U.S. Output Counteract OPEC Cuts

Oil prices were on a steady footing and flat on Tuesday as the impact for bets of an extension in the OPEC-led output cut was undermined by increasing production in the U.S.

Brent crude futures traded at $62.20 per barrel, 8 cents higher from their last close. Meanwhile, U.S. WTI crude futures traded at $56.50 per barrel.

Traders said they were refraining from placing new large positions with the prevailing uncertainty in the markets.

The OPEC, along with a group of non-OPEC producers, have been limiting production since the start of the year in an effort to curb a global oversupply overhang and bolster prices.

The historic agreement to restrain production is due to end in March 2018, but OPEC will convene on November 30 to hold talks on the outlook for policy. OPEC is highly expected to prolong cuts as inventory levels continues to be high despite recent drawdowns. However, there are concerns regarding the willingness of some participants to continue limiting their production.

Energy consultancy FGE projects that if the OPEC/non-OPEC cuts continue, the stocks surplus will fall to just around 50 million barrels higher than the five-year average in 3Q 2018 and prices will reach $65-70 per barrel.