Oil prices steadied on Thursday as traders digested the prospects over possible OPEC action amid record high Saudi Arabia’s output.
London – Crude futures were little changed on Thursday, with the mood affected by news over Saudi Arabia’s record high output amid speculation whether the OPEC will take steps in order to boost prices.
Futures for WTI added 0.06% to trade at $46.82 per barrel, while Brent futures slipped 0.20% to $49.75 per barrel.
The market continues to speculate that the oil cartel was ready to reach an output freeze agreement with non-OPEC producers in order to boost weak oil prices, and as major producers continue to expand their production.
OPEC’s crude oil output increased by 46,000 barrels per day (bpd) to average 33.11 million bpd in July.
Saudi Arabia reported a new record high 10.67 million bpd for last month, while Iranian oil production is back to just shy of the pre-sanctions level of 4 million bpd.
Moreover, the fresh media reports showed that Saudi Arabia could boost its crude output to 10.8-10.9 million bpd in August, which would be a fresh record high, and overtaking Russia’s production.
Analysts are warning against of a price rally based on future talks among OPEC producers as the similar meetings earlier this year failed to bring any results, disappointing the oil market.
“OPEC cooperation hopes should be treated with caution, as this is shaky ground to base a bull rally on,” analysts at Citigroup said.
On the supply story, the Energy Information Administration said on Wednesday that US crude inventories fell by 2.5 million barrels last week, while analysts had forecast a build of about 400,000 barrels.
However, the US oil drilling rig count has risen without pause for seven weeks, signaling more production ahead. The fresh Baker Hughes’ rig count data are scheduled for Friday.
Meanwhile, gasoline stockpiles fell by 2.7 million barrels last week, more than expectations for a 1.5 million-barrel drop.