October 4, 2017 by Grant Smith
(Bloomberg) Oil steadied near $50 a barrel in New York as Russian President Vladimir Putin said the agreement with OPEC to stabilize global markets could last through to the end of next year.
Futures pared losses after Putin said in Moscow that a possible extension of the deal to cut output, due to expire in March, “should be at least until the end of 2018.” Prices slipped earlier after the American Petroleum Institute was said to report that gasoline supplies rose by 4.91 million barrels last week. That will be the biggest gain since January if replicated in government data Wednesday.
While last month’s rally sent oil into a bull market amid stronger demand prospects, prices have struggled to hold above $52 a barrel on concern rising U.S. output may offset OPEC-led supply cuts. Members of the Organization of Petroleum Exporting Countries and its allies need to extend the deal past March for at least three months to support prices, according to UBS Group AG.
“Putin keeps all options on the table,” said Giovanni Staunovo, an analyst at UBS in Zurich. “Nothing has been decided, but if needed, they are willing to extend.”
West Texas Intermediate for November delivery slid 6 cents to $50.36 a barrel on the New York Mercantile Exchange at 1:50 p.m. in London. Total volume traded was about 38 percent below the 100-day average. Prices fell 16 cents to $50.42 on Tuesday.
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Brent for December settlement dropped 11 cents, or 0.2 percent, to $55.89 a barrel on the London-based ICE Futures Europe exchange. Prices lost 12 cents to $56 on Tuesday. The global benchmark crude traded at a premium of $5.23 to December WTI.
Nationwide crude stockpiles fell by 4.08 million barrels last week, the API said Tuesday, according to people familiar with the data. Crude stockpiles at Cushing, Oklahoma, climbed by 2.08 million barrels. An Energy Information Administration report Wednesday is forecast to show supplies slid by 500,000 barrels, according to the median estimate in a Bloomberg survey.
Libya is slowly restarting Sharara, its biggest oil field, after it was halted by an armed group, the latest disruption in the OPEC member’s efforts to revive its energy industry.