Crude oil prices were relatively even early Tuesday as Libyan production resumes after a brief disruption, while anticipation stews over broader OPEC moves.
Parties to an agreement from the Organization of Petroleum Exporting Countries to balance an oversupplied market with production declines are wrapping up meetings in Abu Dhabi that assessed compliance and quotas. The effort, implemented in January, brought a level of support for oil prices, which collapsed below $30 per barrel last year because of supply-side strains.
Saudi Arabia has led the effort, adopting a whatever-it-takes stance on the effort to ease the pressure from an oversupplied market. On balance, demand pressures have increased during the second quarter and crude oil prices have recovered ground after trading in the mid-$40 range for most of the first half of the year.
There’s a lot on the table for oil prices Tuesday. As of 9:10 a.m. EDT, there was no official word on the outcome of the meetings in Abu Dhabi. The effort is under pressure from a resilient Libya, where production is on pace to pass 1 million barrels per day. Libya is exempt from the OPEC agreement so it can steer oil revenue toward national security efforts.
“It is a technical meeting so a statement takes on more significance indicating what might be going on behind the scenes,” Ann-Louise Hittle, head of the Macro Oils division at analysis group Wood Mackenzie, told UPI. “One issue has been the weaker compliance from nations such as Iraq and United Arab Emirates, while Saudi Arabia continues its efforts to increase the impact of its cuts by focusing on exports, not production as it was in the first half of the year.”
The price for Brent crude oil was flat at 9:10 a.m. EDT at $52.37 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.2 percent to $49.49 per barrel.
The Emirati oil company said it was eyeing a production increase above current rates as it courts potential investors of offshore work. Iraq is seen as the least compliant among OPEC members and Libyan production was confirmed as up and running.
Elsewhere, traders will be looking for data from the American Petroleum Institute, which offers a weekly snapshot of supply and demand indicators. Venezuela, meanwhile, continues to simmer, prompting some international oil companies to pull their staff out of the country.
Tamas Varga, an analyst with London oil broker PVM, said in a daily emailed newsletter that geopolitical issues matter for the price of oil.
“This year cannot be accused of being boring as far as geopolitical developments are concerned,” he wrote.