Crude oil prices remained stable on Tuesday after the Organization of Petroleum Exporting Countries (OPEC) said there were clear signs that the market is rebalancing and production in the United States remained limited after Hurricane Nate. The futures on the Brent oil rose by 0.07 USD, or 0.1%, to 55.86 USD per barrel, while those on US light WTI crude oil were traded at a price of 49.66 USD per barrel, or an increase of 0.16%.
The oil market has responded positively to OPEC’s comments that the market has been rebalanced after years of oversupply.
OPEC has taken measures to reduce production and tackle oversupply by the end of the year. The redundancies began in January and will continue until the end of March 2018. There are talks to extend this deadline, but no formal decision has yet been taken.
According to JP Morgan, fears that the agreement will not be respected in the last quarter of the year are now unreasonable. At the same time, the stronger economic growth makes it possible to extend the current deal for another nine months. The bank also said that political disputes between the US and Iran could lead to rising oil prices.
Short-term price support comes from the United States, where 85% of the Gulf oil production, or 1.49 million barrels per day, was discontinued after area being hit by the Hurricane Nate. The oil companies evacuated their staff and closed the platforms in the Gulf of Mexico.