Oil prices stabilized Thursday, having erased last week's gains, with rising production and exports from the U.S. knocking investor confidence over how quickly supply cuts elsewhere could reduce the global glut.
Brent crude, the global oil benchmark, rose 0.8% to $56.25 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.3% at $50.15 a barrel.
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The U.S. Energy Information Administration reported Wednesday that U.S. oil production hit 9.56 million barrels a day in the week ended Sept. 29, its highest level since July 2015, while exports were nearly 2 million barrels a day.
This raised concern over how effective cuts by the Organization of the Petroleum Exporting Countries-led coalition could be globally.
"Another move upward in crude production to within a hair of its 2015 highs shows the considerable challenge U.S. producers are laying down to OPEC," said Edward Bell, an analyst at Dubai-based Emirates NBD Bank.
Discussions over whether the current cuts, in place until March 2018, should be extended are expected to take place in Moscow on Thursday when Saudi King Salman and Russian President Vladimir Putin meet, according to people familiar with the matter.
"Market participants are making a comparison between OPEC's cuts matching how much the U.S. can technically export," said Miswin Mahesh, an oil analyst at consultancy Energy Aspects. Mr. Mahesh said that logistical constraints were likely to make the current level of U.S. exports unsustainable.
The EIA also reported that crude stocks fell by 6 million barrels, which was supportive of prices, indicating the market was moving closer to balancing as global stocks drain.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--rose 1.5% to $1.61 a gallon. ICE gas oil changed hands at $535.75 a metric ton, up $7.50 from the previous settlement.
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(END) Dow Jones Newswires
October 05, 2017 06:14 ET (10:14 GMT)