Oil prices rose on Thursday as the Organization of Petroleum Exporting Countries, OPEC indicated that all options were on the table to balance oil markets and that it would take a decision in December on supply for next year.
Mohammad Barkindo, leader of the exporter group, did not specify if the move would mean extending a pact to rein in production to stabilize prices, but the comments appeared to nudge the market out of pessimism over U.S.-China trade talks.
Global benchmark Brent crude futures rose by 8 cents, or 0.14 per cent to $58.40 a barrel while the U.S. West Texas Intermediate, (WTI) futures were up 10 cents, or 0.19 per cent at $52.69.
A December meeting between the Organization of the Petroleum Exporting Countries plus allies including Russia would take “decisions that will set us on the path of heightened and sustained stability for 2020”, Barkindo said on Thursday.
“Barkindo’s comment reminds markets that if oil prices do not fall off a cliff over demand concerns, we could very see OPEC+ extend their production cuts throughout the majority of 2020,” said Edward Moya, senior market analyst at OANDA in New York.
Separately, Saudi Arabia told OPEC its monthly oil output fell by 660,000 bpd in September after major attacks on its energy facilities, while OPEC lowered its 2020 forecast for non-OPEC supply growth.
Those signals from OPEC suggested a tighter global oil supply picture, but elsewhere abundance reigned.
Price gains were curbed by a report of rising stockpiles in the United States, currently the world’s biggest oil producer.
U.S. crude stocks rose by 2.9 million barrels in the week to October 4, the Energy Information Administration, (EIA) said on Wednesday, more than double analyst expectations.
Additionally, OPEC member Nigeria secured a higher production target from the organization and a force majeure over exports from the key Bonny Light stream was lifted.
Venezuela will also increase its exports despite U.S. economic sanctions that have curtailed shipments as Indian refiner Reliance Industries plans to start loading Venezuelan crude after a four-month pause.
Uncertainty over U.S.-China trade talks resuming on Thursday had previously weighed heavily on the market.
Still, there has not been a sustained rally or fall in prices in recent months, though both oil benchmarks are down more than 20 per cent from April peaks.
“The oil market is neither bullish nor bearish. It is not trending. It has no reason or excuse to trend,” said Tamas Varga of oil brokerage PVM.
“It would be stretching it to say that the market is paralysed, but it is in a stalemate. No one is willing to commit to either direction.”