NEW YORK (Reuters) - Oil prices inched higher on Monday after one of the most bearish weeks in months, propped up by OPEC comments signaling the possibility of continued action to restore market balance in the long term.
Oil production platforms in the Gulf of Mexico also started returning to service after Hurricane Nate forced the shutdown of more than 90 percent of crude output in the area. The prospective restarts kept price gains in check.
Nate has become a post-tropical cyclone that continues to pack heavy rain and gusty winds, the U.S. National Hurricane Center (NHC) said on Monday.
About 85 percent of U.S. Gulf of Mexico oil production is offline in the aftermath of Hurricane Nate, the U.S. Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE) said.
“Quiet market overall this morning though (refined) products are weaker as it looks like Nate was a non-event for refining,” said Scott Shelton, broker at ICAP in Durham, North Carolina.
Separately, Total SA (TOTF.PA) completed the restart of units shut by Hurricane Harvey at its 225,500 barrel per day (bpd) Port Arthur, Texas, refinery not involved in an overhaul planned prior to the storm that hit late in August, the company said.
“I think that without the support of products and Brent, the market may get dragged lower in the near term as it’s apparent that the market doesn’t care much about OPEC already jawboning about an extension of the deal,” Shelton said.
The Organization of the Petroleum Exporting Countries is due to meet in Vienna on Nov. 30, when it will discuss its pact to reduce output in order to prop up the market.
OPEC Secretary-General Mohammad Barkindo said on Sunday consultations were under way for an extension of the agreement beyond March 2018 and that more oil-producing nations may join the pact, possibly at next month’s meeting.
He also said OPEC members and other producers may have to take some “extraordinary measures” to ensure the market is in balance in the long term.
In a speech to the Reuters Global Commodities Summit on Monday, Barkindo said he saw clear evidence the oil market was rebalancing.
Global benchmark Brent crude LCOc1 settled up 17 cents at $55.79 a barrel at 1:25 p.m. EDT (1725 GMT). Earlier in the session it touched a three-week low of $55.06. It ended last week 3.3 percent lower, its biggest weekly loss since June 2017.
U.S. West Texas Intermediate (WTI) crude futures CLc1 ended the session up 0.6 percent or 29 cents higher at $49.58 a barrel. They came close to a four-week low when they fell to $49.13 earlier in the session. WTI’s losses last week came to 4.6 percent.
In further signs that OPEC members are sticking to agreed output cuts, Saudi Arabia said it had curtailed crude allocations for November by 560,000 barrels per day and Iraq’s oil minister said the country was fully committed to its OPEC production target.
Among other bullish news for oil, Morgan Stanley cut its forecast for U.S. crude output growth, citing a range of operational headwinds including limited availability of fracking crews.
Still, U.S. exports have surged as the price of U.S. WTI futures has been trading at a steep discount to Brent.
“Higher U.S. exports are likely to encourage U.S. shale producers to further increase production, which will delay market rebalancing,” Capital Economics said in a note.
“It will take an increase in end-user demand or a reduction in supply to actually help the market to rebalance.”
Money managers raised their bullish bets on U.S. crude futures for the third week in a row, the U.S. Commodity Futures Trading Commission reported on Friday.
However, data published by InterContinental Exchange showed investors had slightly reduced their bets on rising Brent prices in the week ending Oct. 3.
Additional reporting by Karolin Schaps in Amsterdam and Henning Gloystein in Singapore; Editing by Chris Reese and Susan Thomas