Oil Steady Gains Amid Pressure In Market Rebalancing

The oil market is under pressure because of a surge in U.S. dollar but kept their profits from the former session. This was mainly due to the major meeting from producers in Vienna which aims to rebalance their asset allocation.

Since the beginning of 2017, members of the Organization of the Petroleum Exporting Countries including other oil producing countries such as Russia reduced the output by 1.8 million barrels per day. This action is helpful in easing of global crude inventories towards OPEC’s target of the five-year average.

The London Brent crude for November delivery declined by 4 cents at $56.82 a barrel by 0614 GMT which is close to the highest rate since the third month of the year. On the other hand, the U.S. crude market for November delivery dropped by 10 cents at $50.56 but not too far from the latest four-month highs.

The WTI crude decreased to the same month of Brent futures reached $6.28 which has been extensive since August 2015 and further pressured damages incurred by the U.S. refineries following the hurricane disaster.

The dollar index rose by 1 percent against other currencies. The euro declined following the rally in Germany after the election which demonstrates support for the far-right party and prompted Chancellor Angela Merkel to be in opposition.

The energy minister from Russia publicized that there is no agreement yet on the extension of output reduction after March. Yet, this is anticipated before January and this decision is anticipated before the year ends.