Oil prices were little changed on Tuesday as the market waited for OPEC to decide whether to cut supply and head off a glut, even as demand growth slows and U.S. output keeps climbing. The Reuters report was published on 20 November 2018.
At 0117 GMT, U.S. West Texas Intermediate crude futures were at $57.21 a barrel, up 1 cent from the previous settlement. Brent crude, the global benchmark, stood at $66.75 a barrel, down 4 cents.
OPEC, which is effectively led by Saudi Arabia, has been pressing the wider producer alliance to remove between 1 million and 1.4 million barrels per day from the market. The aim is to offset softer demand growth and prevent oversupply from deepening.
BNP Paribas said the next six months could bring a recovery in oil prices after the sharp falls seen in October and early November. The bank pointed to expected “sizeable” losses in Iranian exports because of U.S. sanctions on Tehran, along with disruption risks in Venezuela, Libya and Nigeria.
The French lender said producers were already considering cuts and predicted OPEC would agree to a supply reduction at its next official meeting on 6 December. It also said Brent could recover to $80 a barrel before year-end.
Looking further ahead, BNP Paribas said it expected 2019 averages of $69 a barrel for WTI and $76 for Brent.
Investors remain cautious ¶
Even with the modest price stability, crude was still trading almost a quarter below its early October highs. The slide has been driven by rising supply and weaker demand growth.
U.S. production has been a major factor. Output has risen by almost a quarter this year to a record 11.7 million barrels per day, adding pressure to the market.
Traders have also turned more defensive as the economic outlook worsens and shale growth keeps accelerating. Portfolio managers have sold the equivalent of 553 million barrels of crude and fuels over the last seven weeks, the biggest reduction over a comparable stretch since at least 2013.
That has left funds with a net long position of 547 million barrels, less than half the 1.1 billion barrels held at the end of September and well below the record 1.484 billion barrels reached in January.
