Oil prices steady as Russia touts easing OPEC+ output
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[December 23, 2019] By
Ron Bousso
LONDON (Reuters) - Oil was little changed
on Monday, holding near a three-month high on optimism over a nearing
U.S.-China trade deal even as Russia said an OPEC-led pact may consider
easing output cuts next year.
Brent crude <LCOc1> was up 9 cents, or 0.14%, at $66.23 per barrel by
1240 GMT in thin trading ahead of the Christmas holiday. West Texas
Intermediate <CLc1> was up 3 cents, or 0.5%, at $60.47 a barrel.
The Organization of the Petroleum Exporting Countries and other top
producing nations led by Russia agreed this month to extend and deepen
output cuts in the first quarter of 2020.
However, Russian Energy Minister Alexander Novak said on Monday that the
group known as OPEC+ may consider easing the output restrictions at
their meeting in March.
"We can consider any options, including gradual easing of quotas,
including continuation of the deal," Novak told Russia's RBC TV in an
interview recorded last week, adding that Russia's oil output was set to
hit a record high this year.
Non-OPEC global supply is expected to rise next year due to higher
output from countries including the United States, Brazil, Norway and
Guyana, which became an oil producer last week.
Another source of more oil could emerge in the coming months after
Kuwait indicated that a long-standing dispute over the "Neutral Zone" on
its border with Saudi Arabia will resolve by the end of 2019.
Production at two large oil fields in the Neutral Zone was halted more
than three years ago, cutting output by some 500,000 barrels per day.
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The sun sets behind an oil pump outside Saint-Fiacre, near Paris,
France September 17, 2019. REUTERS/Christian Hartmann/File Photo
Oil prices have risen since the United States and China agreed a so-called phase
one trade deal earlier this month following months of tit-for-tat negotiations
that unsettled markets.
Under a deal due to be signed in January, the United States is expected to agree
to reduce some tariffs in return for a big increase in purchases U.S.
agricultural products by Chinese importers.
"Oil prices will continue to benefit from the positive developments in
U.S.-China trade," said Stephen Innes, chief Asia market strategist at AxiTrader.
Data showing that U.S. energy companies added the most oil rigs last week since
February 2018, primarily in the Permian shale basin, also put pressure on
prices. [RIG/U]
Although the oil rig count was on track to fall for the first year since 2016 as
drillers slash spending to focus on returns, higher productivity means that
output in most shale basins has increased to record levels this year.
(GRAPHIC: U.S. rig count, crude production -
https://fingfx.thomsonreuters.com/
gfx/editorcharts/US-OIL-RIGS/0H001PBQ55VR/eikon.png)
(Additional reporting by Aaron Sheldrick in Tokyo; editing by Richard Pullin,
David Clarke and Louise Heavens)
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