Oil Ticks Lower on U.S. Output Concerns
By Christopher Alessi
LONDON--Oil prices edged down Tuesday morning, as traders shifted their focus from OPEC's output deal back to U.S. production.
Brent crude, the global benchmark, was down 0.16%, at $62.35 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down nearly 0.40%, at $57.24 a barrel.
Prices started to lose traction Monday, with Brent falling more than 2%, just days after the Organization of the Petroleum Exporting Countries agreed with other major producers, including Russia, to extend a deal to curb crude production through 2018.
"An agreement was fully priced in," said Ole Hansen, head of commodity strategy at Saxo Bank. Since OPEC and Russia confirmed Thursday they would continue to hold back crude output by nearly 2% through next year, the market has been "taking a breather" as it stabilizes, he said.
"Now the focus is shifting back to U.S. production," Mr. Hansen said. Investors and analysts are looking ahead to weekly U.S. production data from the Energy Information Administration, due Wednesday.
"The fact that prices are now lower than where they were prior to the confirmation [of the OPEC deal] is not that surprising given the level of expectation that had built up ahead of last week's meetings," said analysts at consultancy JBC Energy in a note Tuesday.
Analysts at Commerzbank attributed "the price slide to profit-taking by speculative investors, who were holding almost record-high net-long positions" ahead of last week's meeting.
OPEC and ten producers outside the cartel first agreed a year ago to cap production at around 1.8 million barrels a day lower than peak October 2016 levels, with the aim of reining in a global supply glut that has plagued the market since 2014 and boosting prices.
Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was down 2.84%, at $1.69 a gallon. ICE gasoil, a benchmark for diesel fuel, changed hands at $553.75 a metric ton, down 0.54% from the previous settlement.
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(END) Dow Jones Newswires
December 05, 2017 06:19 ET (11:19 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.