A report from Baker Hughes Inc. said the number of active rigs in the United States fell by 26 to 614 last week, the lowest in five years, helping ease concerns over the global crude oversupply that has depressed prices. A report showing a fifth weekly fall in the US oil rig count also underpinned crude prices, although trading was thin with China away on holiday.
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LONDON-Global oil investments are set to be slashed by $130 billion this year, crimping supplies and ultimately boosting prices, the chief of the Organization of the Petroleum Exporting Countries said Tuesday at a conference here.
Oil has held near $45 a barrel for more than four weeks after plunging to a six-year low in August amid speculation a global glut will be prolonged.
“We see Brent staying under pressure until first quarter of next year, close to $44 in 2016 Q1 and then rising steadily to $54 in 2016 Q4”, Abhishek Deshpande, oil analyst at French bank Natixis, told the Reuters Global Oil Forum.
News of a potential cooperation between OPEC and Non-OPEC oil producers also helped lift crude oil prices.
Crude reversed earlier gains to trade down 12 cents at 48.42 while Brent oil climbed 5 cents to 51.98 after Wednesday’s US EIA inventory after weekly inventory data showed USA stockpiles of crude oil and petroleum products at a record high.
Demand for oil is expected to go up to 270,00 bpd or to 95.2 million barrels every day, which is up 0.3% from last month’s forecast. “We see a few light at the end of the tunnel”, adding that he saw oil markets regaining balance within one-and-a-half to two years.
Gasoline surged 3 percent, helping drive up prices for both crude and other refined fuels.
OPEC Secretary-General Abdullah al-Badri said on Tuesday the market was improving, suggesting the cartel won’t reduce output any time soon. “Less supply means high prices”, he said.
Russia’s energy minister said Russian Federation and Saudi Arabia discussed the oil market in a meeting last week and would continue to consult each other.
With major producers cutting investment and world oil demand expected to grow, the market will eventually strengthen, according to OPEC Secretary-General Abdalla Salem El-Badri.
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The cartel has since stuck to this plan, keeping its output target level at 30 million barrels per day, in a Saudi-led strategy aimed at squeezing out high-cost U.S. shale producers.
