Oil trades in calm waters as Middle East supply tightens compensating the rising U.S. output

Crude Oil

Oil markets were steady in the market as OPEC members, Saudi Arabia and Iraq to a cut down on supplies in line with efforts to tighten the market in order to prop up prices.

Prices were capped by the rising U.S. oil production and fears that another strong hurricane might hit the United States which could potentially damage refineries and disrupt shipping oil to and from the U.S.

International benchmark, Brent crude futures were trading at $55.48 per barrel and was last seen pinned from their previous close, while the U.S. West Texas Intermediate crude futures were trading at 50$ per barrel, with a subtle increase of 9 cents from their last close.

Saudi Arabia is the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), which has agreed to cut its production to around 1.8 million barrels per day this year and throughout half of 2018 in order to tighten the market and bump prices but with the United States not being a part of the agreement, the goal to push oil prices are being subdued due to the rising U.S. output.

U.S. shale production is set to rise for a tenth month in a row in October, outputs across seven shales plays is forecasted to rise by nearly 79,000 barrel per day to 6.1 million bpd, according to the U.S. Energy Information Administration.


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