Oil down slightly after recent highs
LONDON, November 7, 2017 – Oil prices were relatively flat in early morning trade on Tuesday, pausing for breath after rallying to the highest level in more than two years in the prior session.
Brent crude futures, the benchmark for oil prices outside the U.S., held steady at $64.28 a barrel by 2:55AM ET (0755GMT). It touched $64.44 a barrel on Monday, its best level since July 2015.
Meanwhile, U.S. West Texas Intermediate (WTI) crude futures were little changed at $57.31 a barrel, after climbing to its highest since mid-2015 at $57.61 in the last session.
Oil prices surged more than 3% on Monday, their biggest percentage gain in about six weeks, as the crude market was rattled by political disruptions over the weekend in Saudi Arabia that saw officials and members of the royal family detained.
The weekend purge included a wave of arrests of Saudi Arabian princes, businessmen and government ministers in what has been billed as an anticorruption crackdown but is seen by some as a consolidation of power by Crown Prince Mohammad bin Salman.
Saudi Arabia is among the world’s top producers of oil and OPEC’s most influential member.
Prices received another boost from expectations that oil producing countries will agree to extend an output cut at their meeting at the end of this month.
Under the original terms of the deal, OPEC and 10 other non-OPEC countries led by Russia agreed to cut production by 1.8 million barrels a day (bpd) for six months. The agreement was extended in May of this year for a period of nine more months until March 2018 in a bid to reduce global oil inventories and support oil prices.
Discussions are continuing in the run-up to the Nov. 30 meeting, which oil ministers from OPEC and the participating non-OPEC countries will attend.
Meanwhile, investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2030GMT) Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 2.8 million barrels, which would mark the second weekly decline in a row.
Oil’s rally, which began in early October, has been largely driven by growing indications that the crude market was finally starting to rebalance. Brent is over 40% above June’s 2017 lows, while WTI is one-third higher than its 2017 lows.
In other energy trading Tuesday, gasoline futures edged a shade higher to $1.827 a gallon, while heating oil dipped slightly to $1.938 a gallon.
Natural gas futures were stable at $3.133 per million British thermal units after surging 5% on Monday, its biggest single-session jump since Oct. 30.