Oil Edges Up Ahead of OPEC Report

Oil Edges Up Ahead of OPEC Report

Mr Barkindo said consultations were under way for the extension of the OPEC-led pact beyond March 2018 and that more oil producing nations may join the supply pact, possibly at the next meeting of OPEC in Vienna on November 30.

The oil price crash drove many US shale operators out of profitability, but it was OPEC-and-partners' production cut deal that gave support to oil prices late last year and early this year, prompting USA drillers to return to grow production.

Oil prices have increased for the third consecutive day amid stronger indications that the crude market is gradually tightening following years of oversupply.

The figures mean Opec has complied 98 per cent with the cutback pledge, according to a Reuters calculation, up from 83 per cent initially reported in August as the September rise was led by Nigeria and Libya which are exempt from the cut.

Last year, average USA oil production was 8.9 million bpd, lower than the 2015 level of 9.4 million bpd.

The bank further added that by the end of this year Brent is expected to average around $53 per barrel, which so far averaged $52.70.

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Oil prices are now trading flat, after the Organisation of Petroleum Exporting Countries (OPEC) stated that the market is gradually tightening, after years of oversupply.

Opec's forecasts see that in 2018 that both rising demand and non-Opec output will leave room for its members to pump more and reduce the glut in supplies.

The price of Brent crude oil is now trading around $57.00 a barrel, having risen from six-month lows below $45 a barrel in June.

If OPEC does decide to extend the agreement, oil prices should at the very least, hold firm, and could easily build on recent gains through the remainder of the years.

The Organization of the Petroleum Exporting Countries (OPEC) is trying to reinstate its dominance in the oil industry by trying to maintain crude prices at a sustainable level.

A sharp increase in oil prices would tend to discourage consumption and thus growth.

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