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Oil prices stable as OPEC says market is rebalancing

Published 2017-10-09, 09:11 p/m
© Reuters.  Oil prices stable as OPEC says market is rebalancing
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* Global oil inventories are falling - OPEC

* 1.5 mln bpd of U.S. Gulf output off after storm Nate

By Henning Gloystein

SINGAPORE, Oct 10 (Reuters) - Oil prices were stable on Tuesday as OPEC said there were clear signs the market was rebalancing and as U.S. production remained offline following Hurricane Nate.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $49.66 per barrel at 0054 GMT, up 8 cents, or 0.16 percent, from their last close.

Brent crude futures LCOc1 , the international benchmark for oil prices, were up 5 cents, or 0.1 percent, at $55.84 a barrel.

Traders said that oil prices received support from a statement by the Organization of the Petroleum Exporting Countries (OPEC) saying that oil markets had re-balanced following years of oversupply.

"There is clear evidence that the market is rebalancing," OPEC's secretary general Mohammad Barkindo told Reuters on Monday. process of global destocking continues, both onshore and offshore, with positive developments in recent months showing not only a quickening of the process but a massive drainage of oil tanks across all regions," he added.

OPEC has led an effort to cut output this year in order to end years of overproduction that created a huge supply overhang.

The reductions were implemented in January and are set to expire at the end of March 2018. Talks are underway to extend the supply restraint to cover all of next year.

Analysts said the supply cuts, as well as strong demand, would likely provide price support heading towards the end of the year.

U.S. bank JP Morgan said in a note to clients that previous "concerns that OPEC compliance would fade into the fourth quarter now appear unfounded" and that "stronger than assumed economic growth offers the potential for tight market conditions to continue if OPEC extends the current deal for another nine months."

The bank also said political disputes between the United States and Iran could drive oil prices higher.

Short-term price support was also coming from the United States, where some 85 percent of U.S. Gulf of Mexico oil production, or 1.49 million barrels a day, is offline in the aftermath of Hurricane Nate, the U.S. Department of the Interior's Bureau of Safety and Environmental Enforcement (BSEE) said late on Monday.

Oil companies evacuated staff from Gulf platforms and curtailed output ahead of the storm, which hit the region last weekend.

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