West Texas Intermediate futures were little changed after dropping 2.1 percent to a one-week low on Monday. The Organization of Petroleum Exporting Countries pumped 32.83 million barrels a day in September, up 120,000 barrels a day from August, according to data compiled by Bloomberg. Libyan production is set to recover from a five-month low as the nation’s biggest field restarts following a brief halt. “With news of Libyan output looking to recover back to the 1 million-barrel-a-day level, oil bulls need to hold out for another bout of news on geopolitics,” said Jens Naervig Pedersen, senior analyst at Danske Bank A/S in Copenhagen. Click Read More below for additional detail.
Futures advanced 0.5 percent in New York after rising 1.6 percent earlier. Prices surged 9.3 percent Wednesday, the largest gain since February amid record volumes. OPEC agreed to reduce collective production to 32.5 million barrels a day, prompting predictions of a possible crude rally to $60 a barrel from Goldman Sachs Group Inc. and Morgan Stanley.
Saudi Arabia, which raised oil production to a record this year, will reduce output by 486,000 barrels a day to 10.058 million a day, an OPEC document shows. Iraq, the group’s second-largest producer, agreed to cut by 210,000 barrels a day from October levels. Iran is the only member allowed to raise production, after claiming special consideration following years of sanctions. Non-member Russia agreed to curtail output by as much as 300,000 barrels a day.
Russia, the biggest producer outside OPEC, will cut output from the current level of 11.2 million barrels a day, Energy Minister Alexander Novak said Thursday. Production will decrease gradually in the first half of next year, he said.
Goldman Sachs forecast an increase in prices to $55 for WTI and $56.50 for Brent, saying full compliance with output targets by OPEC and non-members could add an extra $6 a barrel. If the group sticks to its commitments, oil may trade from $50 to $60, Morgan Stanley said.