Oil prices slowed down on Thursday as fuel inventories in the U.S. grew, while OPEC takes actions to reduce output and tighten the market.
U.S. West Texas Intermediate crude was at $50.98 for a barrel this morning, which is 0.6% fall. The global gauge for prices of oil - Brent crude, went down to $56.58, which is the same 0.6% drop.
In 2017, the Organization of the Petroleum Exporting Countries and some states from the outside, including Russia, started their cooperative action to reduce production by 1.8 mln barrels daily to keep up prices. OPEC’s initiative managed to increase oil price by around $10, moving up to $40 for a barrel in the end of last year and the beginning of 2017.
Although traders claim that supply still is abundant regardless of these measures, largely due to expanding US production. This will likely, and it is forecasted by many, make OPEC prolong the reduction further, the current end date is late March 2018.
There are hardly any other options for OPEC than the extension of supply lowering if they’re not willing to give up prices of $40 per barrel, said David Maher of RCMA Group based in Singapore.