Opec Likely to Extend Supply Cuts to Rebalance Market

Opec Likely to Extend Supply Cuts to Rebalance Market

Since the beginning of the talks between oil producers about output reduction amid weak oil prices, Oman has been one of the staunch supporters for production cuts to arrest the fall in crude prices.

"I am optimistic about the whole of 2018", which will be a "recovery year" for oil markets, he said in a speech at the Abu Dhabi conference.

In a monthly report, the Paris-based agency cut its oil demand forecast by 100,000 bpd for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018. The largest Arab oil producer outside of Opec expects crude to stay above US$60 a barrel and sees stable prices next year, Al Rumhy said in an interview.

Oil prices eased for a third day on Tuesday as traders and investors questioned how much the prospect of further rises in US output might overshadow some of the optimism that OPEC-led production cuts would tighten the balance between crude supply and demand.

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Reuters reported last month, citing OPEC sources, that producers were leaning towards prolonging the agreement until the end of 2018, though the decision could be postponed until early next year depending on the market.

The level of inventories held by industrialized above the five-year average "has fallen by more than 50 per cent in 2017, with inventories now at around 160 million barrels", consultancy Timera Energy said.

Bahrain's oil minister, Sheikh Mohammed bin Khalifa al-Khalifa, said on Tuesday he sees no reason why the supply cut agreement between oil producing countries should not be extended on November 30.

Brent crude futures settled down 36 cents, or 0.6 per cent, at $63.16 a barrel while U.S. West Texas Intermediate (WTI) crude futures settled up 2 cents a barrel at $56.76.

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Tensions in the Middle East have raised the prospect of disruptions, but it was unclear whether a strong quake that hit Iran and Iraq on Sunday had affected the region's oil production.

Bahrain said over the weekend that an explosion which caused a fire at its main oil pipeline on Friday was caused by sabotage, linking the attack to Iran, which denied any role in the incident. Stockpiles have declined by more than 180 million barrels this year alone, Barkindo said.

However, the Brent oil price was steady at close to two-year high yesterday, with support from Middle East tensions and record long bets by fund managers balanced by rising US production.

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