Brent Prices Steady Below $97 As Speculation About OPEC Cut Grows
Brent crude oil remained below $97 on Thursday as the growing supply glut continued to outweigh concerns about the conflict in the Middle East.
The commodity traded at $96.65 at 7:40 GMT as investors speculated about whether OPEC would cut supplies in order to bring prices back above $100.
Conflicting opinions about the future for crude oil prices have left investors to wonder whether the Organization of the Petroleum Exporting Countries will cut down on output in order to diminish global supplies and raise prices.
The group’s secretary-general Abdullah al-Badri said last week that he believes a cut will be necessary, while UAE oil minister Suhail Al-Mazroui was quoted as saying it was too soon to tell whether the group would need to make a cut at the November meeting.
Meanwhile, Reuters reported that Libyan oil output is slowly returning to the nation’s original capacity before protests shut down most of its oilfields.
The nation’s oil exports have increased to 900,000 barrels per day, up 100,000 barrels from the beginning of the week.
Geopolitical risk remains in the back of investors’ minds, but has had little effect on prices recently. U.S. air strikes have been targeting Syrian oilfields that have been over taken by Islamic militants in an effort to cut off the group’s revenue sources.
Though the strikes have the potential to disrupt the Middle East’s oil exports to the rest of the world, markets have largely disregarded the conflict. Instead, the focus has been on global demand’s inability to keep up with growing supplies.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.