Brent crude futures LCOc1, the international benchmark for oil prices, were at $60.78 per barrel at 0626 GMT. That was 12 cents, or 0.2 percent, below their last settlement, but still not far off July 2015-highs reached earlier this week, and up some 37 percent since their 2017-lows last June.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $54.10 a barrel, 5 cents below their last close. That was still near their highest level since February and up around 28 percent since 2017-lows marked in June.
Traders said there was profit-taking after crude prices rose by around 5 percent in October.
Amid generally upbeat market sentiment, analysts were cautious after several days dominated by strong price rises.
“U.S. shale output could keep a lid on prices over the medium to long-term,” said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers.
WTI’s $6.7 per barrel discount to Brent CL-LCO1=R is a result of rising American crude production C-OUT-T-EIA, which is up almost 13 percent since mid-2016 to 9.5 million barrels per day (bpd), making U.S. crude exports highly profitable.
Despite Tuesday’s price dips, market sentiment remained confident, fueled by a pledge led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to hold back about 1.8 million barrels per day (bpd) in oil production to tighten markets and prop up prices.
While the actual cuts aren’t quite as high as the target, analysts say overall compliance has been strong.
“The OPEC deal compliance has been very firm, with rates averaging 86 percent since January,” according to Bank of America Merrill Lynch.
The pact runs to March 2018, but Saudi Arabia and Russia have voiced support to extend the agreement.
OPEC is scheduled to meet officially at its headquarters in Vienna, Austria, on Nov. 30.
“The fear of oversupply could easily turn to a fear of undersupply if inventories keep declining like they have been and demand continues to grow,” said William O‘Loughlin, investment analyst at Rivkin Securities.
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