Oil steadies

LONDON. — Oil prices held largely steady yesterday as the prospect of further rises in US output offset some of the optimism that OPEC-led production cuts would tighten the balance between crude supply and demand.

Brent crude futures LCOc1 were at $63,11 per barrel at 0942 GMT, down 5 cents, while US West Texas Intermediate (WTI) crude CLc1 was down 13 cents at $56,63.

Both benchmarks early in the previous week hit highs last seen in 2015, but traders said the market had lost some momentum since then.

Traders said they were cautious about betting on further price rises.

“Prices . . . are starting to look like a pause or pullback is needed,” said Greg McKenna, chief market strategist at futures brokerage Axi-Trader.

This sentiment comes in part on the back of rising US oil output C-OUT-T-EIA, which has grown by more than 14 percent since mid-2016 to a record 9,62 million barrels per day (bpd).

The US government said on Monday US shale production in December would rise for a 12th consecutive month, increasing by 80 000 bpd.

A cooling Chinese economy also stoked some concerns about demand, although so far the country’s refiners are processing crude oil near record levels of 11,89 million bpd.

Fitch Ratings said in its 2018 oil outlook that it assumed 2018 “average oil prices will be broadly unchanged year-on-year and that the recent price recovery with Brent exceeding $60 per barrel may not be sustained”.

So far in 2017, Brent has averaged $54,5 per barrel. Despite the cautious sentiment, traders said oil prices were unlikely to fall far, largely due to supply restrictions led by the Organisation of the Petroleum Exporting Countries and Russia, which have helped reduce excess stockpiles.