Global oil benchmark, Brent crude, rose above $61 per barrels on Tuesday after a week of gains as the prospect of increasing United States exports dampened bullish sentiment that has driven Brent crude to more than two-year highs above $60 per barrel. Brent, against which half of the world’s oil is priced, increased to $61.32 a barrel by 8:00pm, up around 37 per cent from its 2017 lows hit in June.
The United States West Texas Intermediate crude was seven cents or 0.1 per cent higher at $54.21, still near its highest since February and close to its highest for more than two years.
Traders and brokers said investors were adjusting positions after price rises of around five per cent in October.
The US crude exports have jumped close to two million bpd and production has risen almost 13 per cent since mid-2016 to 9.5 million bpd.
“The problem is as soon as prices move up it’s too easy for the US producers to add another rig or another completion crew,” said Stewart Glickman, energy equity analyst at CFRA Research in New York, “Then they increase production and you’re back where you started.”
Six analysts polled by Reuters ahead of inventory reports estimated, on average, that crude stocks were forecast to have fallen by 2.6 million barrels in the week ended October 27.
Iraq’s move to increase oil exports from its southern ports by 220,000 bpd to 3.45 million bpd to make up for supply disruptions from its northern Kirkuk fields also weighed on prices, traders said.