Oil prices edge up as Opec confirms the market is rebalancing

Brent Crude

Brent Crude

Oil prices were mixed on Monday with global benchmark Brent Crude down 0.50% recently, while US crude West Texas Intermediate was unchanged after some comments from OPEC officials signaled that the group and other producers may take further action to restore market balance.

Market participants also continue to win back data on the dynamics of the number of drilling rigs in the U.S. The American oil and gas service company Baker Hughes, a GE Company (BHGE) reported that for the week ended on October 6, the number of installations fell by four, or by 0.4 percent to 936 units.

The head of the Organization of the Petroleum Exporting Countries (OPEC) Mohammed Barkindo has encouraged United States shale producers to help reduce the global oil supply.

The demand gains prominence as India is diversifying India's crude oil supply sources. The move underlined Saudi Arabia's new emphasis not only on cutting its oil production but also the amount that it exports into the global market.

They write that a higher differential means higher USA exports.

Indian Petroleum Minister Dharmendra Pradhan on Sunday again raised the issue of premium being charged on oil supplied to Asian countries by some OPEC members and asked that a reasonable pricing policy be adopted by the 13-nation producers' cartel.

Saudi Arabian Oil Co., known as Aramco, is slashing over 7% of the crude it exports by sea in November compared with past year, the kingdom's oil ministry said. “Number two, to sustain this into next year, some extraordinary measures may have to be taken in order to restore this stability on a sustainable basis going forward.”.

Last November, major oil producers agreed to cut output as a response to the global supply glut that had been pushing down prices for almost two years.

But Monday's price increase was relatively muted, analysts said.

Among other bullish news for oil, Morgan Stanley cut its forecast for USA crude output growth, citing a range of operational headwinds including limited availability of fracking crews.

India now is the world's third-largest oil consumer.

Bill O'Grady, chief market strategist at Confluence Investment Management, said US crude futures could climb as high as $60 a barrel.

The data will give traders a better picture of whether a global rebalancing is taking place in the oil market.

Elsewhere on Nymex, shed 0.6 cents, or 0.4%, to $1.550 a gallon, while slipped 0.5 cents, or 0.3%, to $1.738 a gallon.

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