Oil prices steady as news points to balanced market

London — Oil prices steadied on Thursday as the prospect of Opec+ curbing output was offset by the possibility of an agreement that could return sanctioned Iranian exports to the market.

Brent eased 2c to $101.20 a barrel by 10.33am GMT, while US West Texas Intermediate was down 22c, or 0.2%, at $94.67.

Comments on Monday by Saudi energy minister Prince Abdulaziz bin Salman about a disconnect between the futures and physical markets and the possibility of Opec+ cutting production have helped push oil prices to three-week highs.

“The suggestion that the price did not align with fundamentals and that Opec+ could cut output has clearly had the desired effect,” Oanda analyst Craig Erlam said.

“It may also make the chance of a move back below $90 in the near term hard to come by unless a nuclear deal is agreed on and Opec+’s appetite for cuts is put to the test,” he added.

Talks between the EU, the US and Iran to revive a 2015 nuclear deal are continuing, with Iran saying it had received a response from the US to the EU’s “final” text to resurrect the agreement.

Falling US crude and product stockpiles also added to the upward pressure on prices. Oil inventories fell by 3.3-million barrels in the week to August 19 at 421.7-million barrels, more than analysts’ forecasts for a 933,000-barrel drop.

The bullish impact was countered by a drawdown in petroleum inventories that was less than expected, reflecting tepid demand.

US petroleum stocks fell by 27,000 barrels in the week to 215.6-million barrels, compared with earlier expectations for a drop of 1.5-million barrels.

Reuters