LONDON – Oil prices on Friday morning gave up some of Thursday's robust gains, as investors put the brakes on Brent crude's upward march to the elusive $60-a-barrel mark.
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Brent, the global benchmark, was down 0.22%, at $58.90 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.23%, at $52.52 a barrel.
"It can't really go above $60" a barrel, Giovanni Staunovo, a commodity analyst at UBS Wealth Management, said of the price of Brent. "If it goes too high, it's an indication to U.S. shale producers to produce more oil"--a development that could undermine the oil market rebalancing under way.
Mr. Staunovo said UBS expects the price of Brent to stay in a range of $55 to $60 a barrel.
Brent hit a two-year high Thursday, settling at $59.30 a barrel, helped by declining inventories of fuel and optimism that the Organization of the Petroleum Exporting Countries will likely extend a deal to limit production and rein in global oversupply.
"There is certainly no general consensus on whether this psychological threshold [$60 a barrel], which was last seen in July 2015, will be overcome in the near-term," Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd., wrote in a note Friday.
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Mr. Brennock said the "ingredients are there" for Brent to move higher but that "sustaining it will be a herculean challenge."
Prices have been supported this week by data showing declining commercial petroleum stocks in the U.S. and news that Saudi Arabia and Russia--the world's two largest crude producers--want to extend the agreement to curb output after the deal expires in March 2018, likely through the end of next year.
OPEC and some major producers outside the cartel, including Russia, first agreed late last year to cap their production at around 1.8 million barrels a day lower than peak October 2016 levels, with the aim of alleviating global oversupply and boosting prices.
OPEC and Russia are set to formally discuss an extension of the deal at the cartel's next official meeting in Vienna on Nov 30.
Meanwhile, analysts and investors are looking ahead to monthly U.S. supply and demand data, out on Tuesday.
Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was up 0.93%, at $1.70 a gallon. ICE gasoil, a benchmark for diesel fuel, changed hands at $539.50 a metric ton, up 0.61% from the previous settlement.
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(END) Dow Jones Newswires
October 27, 2017 06:28 ET (10:28 GMT)