Mubasher: Oil prices advanced on Tuesday as the world’s major crude producers agreed to extend their output cuts until the first quarter of next year, Reuters reported.
However, concerns that global demand growth could stutter with indicators of a global slowdown on the rise, weighed on crude prices.
By 8:39 am GMT, US Nymex crude futures inched up by 0.03% to $59.11 per barrel (pb), while global benchmark Brent futures went up by 0.06% to $65.10 pb.
The Organization of the Petroleum Exporting Countries (OPEC) agreed on Monday to keep oil production curbs in place until March 2020 as the producer club’s members managed to reach a consensus to buoy crude prices.
OPEC members are set to meet with Russia and other non-affiliated partners, a producer grouping known as OPEC+, later on Tuesday to discuss supply restraints vis-à-vis surging US crude production.
Russian President Vladimir Putin on Saturday indicated that he agreed with Saudi Arabia on extending the global deal to withhold supplies until December 2019 or March 2020.
Russia already cut its crude production by more than the agreed amount in the supply-cutting deal last June, according to a Reuters report.
Also supporting prices was the third straight drop in US oil inventories, as per shown in a poll by the news agency.
While US output hit a monthly record of 12.16 million barrels per day (bpd) last April, new shale oil production is set to wane this year from the prior one, Reuters said, citing a survey of major forecasters.
However, worries about a weaker global growth persisted, capping oil price gains.
Despite the US and China agreed at the Group of 20 (G20) summit to resume trade talks, oil markets were dragged down by a downturn in factory activity across most of Asia and Europe last June, as well as an easing manufacturing output growth in the US.
“Oil traders will now turn their attention to the economic data, as the weakening global activity and waning demand could again weigh on the sentiment and call for a downside correction in oil prices following the June rebound,” a note by London Capital Group senior market analyst Ipek Ozkardeskaya was quoted by Reuters.
