Oil prices inch higher in pre-Christmas trading
An Oil Pump Jack
Oilpricesedgedhigheron Tuesday in thin pre-Christmas trading after Russia's energy minister said cooperation with OPEC tosupportthe market would continue and as analystsforecasta second weekly decline in UScrude inventories.
Brent crude was up 5 cents at $66.44 a barrel by 0321 GMT. USWest Texas Intermediate was 1 centhigherat $60.53 a barrel.
OPEC, Russia and other producers that have linked up to curtail production andsupportpriceswill continue their cooperation as long as it is "effective and brings results," Russian energy minister Alexander Novak said in an interview on Monday.
Cooperation with the Organization of the Petroleum Exporting Countries (OPEC) would continue "until the market requires it," Novak added.
OPEC and other producers agreed in November to extend and deepen output curbs in place since 2017. The reduction of output could see as much as 2.1 million barrels per day (bpd) taken off the market, or about 2 per centof global demand.
Still, OPEC needs to do more to balance out the market on a sustainable basis, Bjornar Tonhaugen, head ofoilmarket research at Rystad Energy said in a note.
"The OPECcutsdidn't fully solve the probleminstead they offer a light bandage to get through the first quarter of 2020," said Tonhaugen, adding "after that, we believe the market will begin to realize the looming oversupply."
USproducers have been happy to fill any gaps in the market, pumping ever greater amounts of crude to reach a record high of around 13 million bpd in November.
That has helped swell inventories, which have been stubbornly resistant to drawdowns. USstocks are up around 1 per centthis year.
Crude stocks are, however, expected to have fallen by about 1.8 million barrels last week, a second week of declines, according to a preliminarypoll.
Still, gasoline stocks are expected to have risen for a seventh week in a row and distillate inventories areforecastto have gained for a fifth consecutive week.