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Oil Futures Mixed as OPEC Output Rises, EIA Raises 2018 Price Forecast

October 11, 2017 at 16:54 by Andrew Moran

Oil prices are mixed midweek as traders start to sift through new reports from Organization of Petroleum Countries (OPEC) and the US Energy Information Administration (EIA). The former increased its projections but warned about rising output levels, while the latter lifted its price forecasts for this year and 2018.

November West Texas Intermediate (WTI) crude futures rose $0.10, or 0.20%, to $51.02 per barrel at 16:41 GMT on Wednesday on the New York Mercantile Exchange. US crude is looking for its third straight session gain as prices remain above the crucial $50 threshold.

Brent, the international benchmark for oil prices, is in the red in the middle of the trading week. December Brent crude futures tumbled $0.15, or 0.27%, to $56.46 a barrel on London’s ICE Futures exchange.

OPEC published its monthly report on Wednesday, which found that crude production increased 90,000 barrels per day (bpd) last month, limiting the cartel’s efforts to cap output levels. The group did raise its forecast for international oil demand by roughly 30,000 bpd for the remainder of 2017 and next year: 1.5 million bpd in 2017 and 1.4 million bpd in 2018.

This comes as Russia and Saudi Arabia are reportedly in agreement to extend OPEC’s production freeze until the end of next year. Many OPEC members and non-OPEC oil countries say they can buoy prices by limiting the output of Texas Tea.

The EIA gave its price forecasts a boost on Wednesday as it lifted prices, production, and demand outlooks for 2018. The US government agency projects WTI prices to sit at $49.69 a barrel this year and to increase to $50.57 in 2018. Because of the Columbus Day holiday, the EIA will publish its weekly update on US crude supplies on Thursday.

Analysts surveyed by S&P Global Platts anticipate the EIA to show a decrease of 400,000 barrels in stockpiles, a decline of 1.4 million barrels in gasoline supplies, and a drop of 1.64 million barrels in distillate stocks.

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