Oil Steady on OPEC Cuts

Oil prices were steady on Tuesday as news of lower production by OPEC and other key exporters was balanced by reports of more drilling and higher output in the United States.

Benchmark Brent crude was down 5 cents at $55.18 a barrel, while US light crude rose 5 cents to $52.80, Reuters reported.

Ministers from the Organization of Petroleum Exporting Countries and big producers outside the group said on Sunday that of the almost 1.8 million barrels per day they had agreed to remove from the market starting on Jan. 1, 1.5 million bpd had already been cut. Ministers were engaged in a campaign of “bullish rhetoric”, talking up their deal to make sure the market responds positively, said Tamas Varga, senior analyst at London brokerage PVM Oil Associates.

“Call it a charm offensive or determination to succeed,” Varga said. “One thing is certain: the level of cooperation between OPEC and non-OPEC producers is unprecedented.”

Bernstein Energy said global oil inventories declined by 24 million barrels to 5.7 billion barrels in the fourth quarter of last year from the previous quarter. This amounts to about 60 days of world oil consumption.