Oil nearly unchanged on minor technical correction

By Koustav Samanta, Reuters
Oil prices were little changed in quiet technical trade on Tuesday as declining U.S. production and a "rebalancing" momentum in the market offset expectations of Iranian barrels adding to the already persistent supply glut.
REUTERS/Darrin Zammit Lupi/Files

Oil prices were little changed in quiet technical trade on Tuesday as declining U.S. production and a "rebalancing" momentum in the market offset expectations of Iranian barrels adding to the already persistent supply glut.

Brent futures for December delivery fell 17 cents to $48.44 a barrel, a 0.4 percent loss, by 11:49 a.m. EDT.

U.S. crude or West Texas Intermediate front futures contract, due to expire later on Tuesday, was down 21 cents, or 0.5 percent, at $45.68 per barrel.

"Tuesday oil trading action is dominated by transitions to the December contract for West Texas Intermediate. Price action is undecided, nearly directionless," said Richard Hastings, macro strategist at Seaport Global Securities.

"Monday was pretty bearish, and this morning’s trades suggest there is nothing to offset that mood today."

Crude oil fell about 4 percent on Monday after Chinese official data showed the world's second-largest economy has grown at the slowest pace in six years during the third quarter.

On a weekly basis, U.S. crude oil production has remained about 9.1 million bpd since the start of September, according to U.S. Energy Information Administration data, well below the 9.6 million bpd peak seen in April.

Vitol, the world's largest oil trader, said it believes the crude price will struggle to trade above $60 a barrel next year, as the effects of slowing global demand growth could be compounded by a return of Iranian and maybe even Libyan barrels.

Iran is expected to boost oil production when international sanctions are lifted after it implements the conditions of a nuclear deal agreed with major world powers. Libya is producing around 400,000 bpd.

A senior Iranian oil official said on Monday that Tehran planned to increase crude production by 500,000 bpd within a week of the lifting of sanctions, selling the oil to traditional customers in Asia and Europe.

Major oil exporters in the Middle East are pumping around 2 million bpd more crude oil than needed at the moment, analysts say, filling inventories around the world.

Industry group the American Petroleum Institute (API) will report its stocks data later on Tuesday, while EIA will release oil inventory data on Wednesday.

U.S. commercial crude oil stockpiles are expected to rise for a fourth consecutive week last week, a Reuters survey showed.

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