Mubasher: Oil prices edged up on Tuesday, after declining earlier in the session, on the back of expectations that major crude producers would scale back their output, but tepid demand growth projections kept a lid on the gains, Reuters reported.
By 9:06 am GMT, US Nymex crude futures rose by 0.31% to $55.10 per barrel (pb), while international benchmark Brent futures inched up by 0.09% to $58.62 pb.
Saudi Arabia, the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), announced its plan to maintain its oil production below 7 million barrels per day (bpd) in August and September to clear global oil inventories.
In addition, Riyadh is expected to shore up its prices, with Saudi Aramco, the state-owned oil giant moving ahead with a $2 trillion market float.
The timing for what could be the world’s biggest initial public offering (IPO) would only be decided only by the sole shareholder, the Saudi government, according to a senior executive.
In the same vein, Kuwait, another OPEC member, confirmed its commitment to the supply restraints agreed on between the producer club and non-affiliated partners, an alliance known as OPEC+, as the oil-rich Gulf country over-delivered on the output curbs.
The alliance has been holding 1.2 million bpd since the beginning of this year.
However, a shale bonanza in the US was countering efforts to cut supply worldwide, dragging prices down.
US oil output from seven major shale plays was projected to climb by 85,000 bpd to a record 8.77 million bpd next September, the EIA said.
On the demand front, gloomy global economic outlook and oil consumption growth weighed on crude prices as the trade tussle between the US and China escalated.
“The swift reaction from Saudi Arabia will likely stabilize oil prices, but the oil price probably won’t move much above $60 per barrel until there is evidence of progress in US-China trade negotiations,” a note by VM Markets managing partner Stephen Innes was quoted by the news agency.