Oil prices steady near 2-year highs as market tightens amid Opec cuts

Oil

Oil prices steadied near two-year highs on Thursday as supply cuts by Opec and other major exporters tightened the market and drained inventories.

Benchmark Brent crude was down 20 cents at $60.29 per barrel by 1345 GMT. On Wednesday, Brent reached $61.70, its highest intraday level since July 2015. The contract is up by more than a third from its 2017-lows in June.

US light crude was unchanged at $54.30, almost 30 percent above its 2017-lows in June.

“The upswing in oil prices appears to have ended for the time being,” said Carsten Fritsch, commodities analyst at Commerzbank in Frankfurt.

Some investors had booked profits after the recent price rally, traders said, but the market outlook remained upbeat.

Confidence has been fuelled by an effort this year lead by the Organization of the Petroleum Exporting Countries and Russia to hold back about 1.8 million barrels per day (bpd) in oil production to tighten markets.

Saudi Arabian Energy Minister Khalid al-Falih said on Thursday supply and demand balances were tightening and oil inventories falling, while compliance with the OPEC-led pact to curb supplies had been “excellent”.

Overall, oil markets have been slightly undersupplied this year, resulting in inventory drawdowns.

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