Oil Steadies on Supply Cut Doubts

Oil prices steadied on Wednesday as investors waited to see if OPEC and Russia would deliver promised production cuts designed to end a supply overhang that has weighed on the market for more than two years.

North Sea Brent crude oil was up 10 cents a barrel at $54.03. US light crude was up 15 cents at $51.08 a barrel, Reuters reported. Oil prices surged almost 20% after the Organization of Petroleum Exporting Countries and Russia announced last week that they would cut production next year in an effort to prop up markets.

But doubts have emerged over whether the planned cuts will be big enough to rebalance the market. Since the deal was announced, both OPEC and Russia have reported record production and output elsewhere is also resilient. The US Energy Information Administration said on Tuesday it expected domestic crude oil production for 2016 and 2017 to fall by less than previously expected.

“Investors are torn between hopes that producers will cut enough production to balance supply and demand, and fears that they won’t,” said Tamas Varga, senior analyst at London brokerage PVM Oil Associates.