Oil prices steadied on Monday, boosted by hopes that OPEC and non-OPEC members would continue their pact to cut production beyond 2018. There was, however, also news of rising production from Libya.
Comments from Saudi Arabia´s energy minister indicating the country favoured extending oil production cuts into next year provided support for the market.
“There is a readiness to continue cooperation beyond 2018 . The mechanism hasn’t been determined yet, but there is a consensus to continue,” said Saudi energy minister Khalid al-Falih, speaking in Oman.
Along with hopes of a further extension of the all-important OPEC agreement, crude has also received support from recent dollar weakness.
The dollar basket was 0.14% lower on Monday, as the US government shutdown continued.
However, Libya´s state owned producer National Oil Corp. announced that it was recommencing production at one of its key oil fields, putting downward pressure on prices.
As at 11.55 GMT oil prices were virtually unchanged, trading at $68.58 per barrel.
The resumption of production from Libya´s Wintershall’s As-Sarah oil field was expected to add 55,000 barrels per day to Libya´s output.
Libya currently produces around 1 million barrels of crude per day.
While increased production from Libya is likely to put a cap on oil prices this week, there is still hope of further positive price progression over the coming months.
The current buoyant nature of global growth is also viewed as highly supportive.
Along with a resumption in production from countries such as Libya, there is also rising US production to consider.
A report from OPEC last week pointed to steadily rising US production this year, highlighting the lower breakeven rates for US drillers due to improvement in technology.
However, the report also said global demand for oil was likely to rise at a faster rate during 2018.
On Friday, the market was hampered by data from the US Energy Information Administration (EIA) showing US oil output had risen to 9.75 million barrels per day as at January 12, versus 9.49 million barrels at the beginning of 2018.