London, UK | – Oil futures rose on Tuesday supported by production suspensions in the US Gulf due to an expected tropical storm and speculation that OPEC meeting in Algeria next month will act to prop up prices.
Brent crude futures were trading at $49.53 per barrel at 1142 GMT, up 27 cents from the previous close.US West Texas Intermediate (WTI) crude was up 36 cents at $47.34 a barrel.
Oil and gas operators in the US Gulf of Mexico have shut output equal to 168,334 barrels per day (bpd) of oil and 190 million cubic feet per day of natural gas as a precaution against a tropical storm, the US Bureau of Safety and Environmental Enforcement said on Monday.
Oil prices have also been taking direction from speculation that a meeting next month in Algeria of major producers, including members of the Organization of the Petroleum Exporting Countries (OPEC), could yield a production deal to support prices.
“Prices are still finding support from the expectations of an agreement on production caps being reached at the late-September meeting,” Commerzbank said in a note.
Saudi Arabian Energy Minister Khalid Al-Falih told Reuters last week he does not believe an intervention in oil markets is necessary since the “market is moving in the right direction”.
Iraq – which exported more crude this month from its southern ports than in July – will continue ramping up output, its oil minister said on Saturday.
A Nigerian militant group has said it has ended attacks on the nation’s oil and gas industry that have reduced the OPEC member’s output by 700,000 barrels a day to 1.56 million bpd.
But the prospect of a recovery in oil production from Libya happening any time soon was tempered after the head of the country’s National Oil Corp. said budgetary delays from the new government were undermining oil production.
“Oil prices are caught between concerns about oversupply and a strong dollar on the one hand and the prospect of further jawboning from OPEC members that some form of production freeze could be on the cards,” CMC Markets senior analyst Michael Hewson said.
The huge global oil oversupply that has weighed on prices for the past two years may not clear until the second half of 2017, Shell’s chief energy adviser Wim Thomas told Reuters.