OIL PRICES: ABOVE $51
According to WSJ, crude futures steadied Thursday with the market still digesting bearish data from the Organization of the Petroleum Exporting Countries which showed a further increase in oil output.
Brent crude, the global oil benchmark, rose 0.2% to $51.91 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.1% at $50.21 a barrel.
OPEC's production in September rose by 220,000 barrels a day to 33.39 million barrels a day, its highest since 2008.
The 14-member cartel has been increasing production ahead of introducing a potential production cap of a maximum of 33 million barrels a day.
"The news is hardly surprising as even oil producing nations are desperate for petro dollar. So why not ramp it up before the yet to be completed production cap comes to play," said Stuart Ive, a client manager at OM Financial.
In late September OPEC agreed to discuss and possibly complete the details of a production cut at its next meeting in Vienna on Nov. 30. Oil prices have rallied since, peaking at a one-year high on Monday.
The strong production by OPEC shows the eagerness of its members to protect their market shares even at a time when prices have been hammered by a glut for more than two years.
"This highlights the need for production cuts," Commerzbank said in a note.
While prices initially responded positively to the preliminary pact, the market is still on the fence whether the cartel will come through with the cuts, and the latest OPEC production data has fueled doubts. Moreover, the lack of a strong and clear commitment from Russia to get on board with the cut is stirring up more speculation about whether the plan will materialize.
"When it comes to Russia, the jury is still out," said Ben Le Brun, an analyst at OptionsXpress, adding that the heightening uncertainty will likely cap U.S. oil prices below $50.
The recent rise in oil prices has also triggered concern that U.S. producers may respond by increasing their output.
Traders and analysts eyed a possible rise in U.S. oil stocks with official data due from the Energy Department later today.
The stronger dollar also weighed with the WSJ dollar index edging up 0.1%, holding near a seven-month high, making oil more expensive in foreign currencies.
Nymex reformulated gasoline blendstock—the benchmark gasoline contract—fell 0.1% to $1.46 a gallon. ICE gasoil changed hands at $466.50 a metric ton, up $1.25 from the previous settlement.
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