Oil is steady as Opec cuts counter rising United States output


The West Texas Intermediate for December delivery was down 0.37 USA dollar to settle at 55.33 dollars a barrel on the New York Mercantile Exchange, while Brent crude for January delivery lost 0.34 dollar to close at 61.87 dollars a barrel on the London ICE Futures Exchange.

Futures were little changed in NY after falling 2.5 percent the previous two sessions.

Meanwhile, domestic United States oil output rose by another 25,000 barrel a day to 9.645m b/d. Nine out of 11 analysts surveyed by Bloomberg had forecast a stockpile decline. While the high reached $56.77. Russia, one of its partners in the deal, is said to be unconvinced a decision to prolong the agreement is needed when OPEC meets in Vienna this month.

Oil prices edged lower on Thursday as rising U.S. production and inventories threatened to undermine a rally sparked by tightening world supply as a outcome of OPEC's curbs on output. "That's a bullish view and could leave the market utterly disappointed when the decision is made". "Brent would break back below US$60 a barrel".

West Texas Intermediate for December delivery was at $55.40 a barrel on the New York Mercantile Exchange, up 7 cents as of 7:45 a.m.in London.

Christopher Kuplen, BofAML's Research Analyst, argues that since 55 per cent of global oil is consumed in transportation, of which more than half by passenger vehicles, the demand for oil would eventually fall.

The recent gains recorded by global oil prices have slipped as the commodity has lost more than $2 in seven days.

While the crude build of 1.9 million barrels reported by the Energy Information Administration was more than forecast, it was not as big as the increase of 6.5 million barrels reported on Tuesday by industry group the American Petroleum Institute.

"To compete with Brent in Asia, WTI prices must reflect the additional transportation costs USA crude oil exports incur on their way to Asia", EIA reported.