Oil prices on Wednesday, February 1, steadied as Russia joined the Organization of Petroleum Exporting Country, OPEC, in cutting production to try to balance the market.
Brent crude futures LCOc1, the international benchmark for oil prices, were trading at $55.63 per barrel at 0749 GMT (02:49 a.m. ET), up 5 cents from their last close.U.S. West Texas Intermediate (WTI) crude futures CLc1 rose 5 cents to $52.86 a barrel.
Prices reversed earlier falls after reports that Russia cut its oil and gas condensate production by around 100,000 barrels per day (bpd) between December and January, down to 11.11 million bpd.
Russia’s cuts are part of an effort led by the Organization of the Petroleum Exporting Countries (OPEC), of which Russia is not a member, to prop up the market and end a global fuel supply glut.
As part of this, OPEC has said it will cut production by around 1.2 million barrels per day (bpd) in the first half of 2017. Other producers, including Russia, have pledged to cut another 600,000 bpd in output.
A Reuters survey published on Tuesday showed that OPEC’s output fell by over 1 million bpd in January to 32.27 million bpd between December and January.
“That’s a good start … to cut production to bring the market back toward balance,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
Traders said a reported climb in U.S. crude inventories was also preventing oil prices from rising by much.
