SINGAPORE: Oil prices were stable on Friday, supported by Venezuela’s struggles to meet its supply obligations and by ongoing output cuts led by producer cartel OPEC, although surging U.S. crude output was looming over markets.
Brent crude futures, the international benchmark for oil prices, were at $77.24 per barrel at 0317 GMT, a notch below their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 9 cents at $66.04 a barrel.
Prices were pushed up by supply trouble in Venezuela, where state-owned oil firm PDVSA is struggling to clear a backlog of around 24 million barrels of crude waiting to be shipped to customers.
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Despite this, oil markets are not unanimously bullish.
One of the key features of oil markets recently has been the widening discount of U.S. WTI crude versus Brent, which has almost quadrupled since February to more than $11 per barrel, its steepest discount since 2015.
Brent has been pushed up by voluntary production cuts led by the Middle East dominated producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) and by top producer Russia, which were put in place in 2017.
The group and Russia are due to meet at its headquarters in Vienna on June 22 to discuss production policy.
While the outcome of those talks is unclear, most analysts do not think that OPEC will turn on its taps all the way.
In North America, however, surging U.S. output has pressured WTI crude futures.
U.S. crude oil production hit another record last week at 10.8 million barrels per day (bpd).
That’s a 28 percent gain in two years, or an average 2.3 percent growth rate per month since mid-2016 and puts the United States close to becoming the world’s biggest crude oil producer, edging nearer to the 11 million bpd churned out by Russia.
