Brent oil prices gained slightly on Tuesday, stabilizing near $50 a barrel on tentative signs that a persistent rise in U.S. crude production may be slowing.
The international benchmark LCOc1 gained 15 cents to $49.83 per barrel by 1409 GMT. U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading up 18 cents at $47.25 a barrel. Brent futures have risen for nine days in a row, the longest stretch of gains since July 2009, reports Reuters.
Both contracts traded lower earlier in the session as many traders closed positions ahead of the U.S. Independence Day holiday on July 4, while Brent also faced technical resistance as it approached $50, traders said. Despite this, the market’s outlook has shifted somewhat.
Late May and most of June were overwhelmingly bearish as U.S. output rose and doubts grew over the ability of the Organization of the Petroleum Exporting Countries to hold back enough production to tighten the market.
But sentiment began to shift towards the end of June when data showed a dip in U.S. oil output and a slight fall in drilling for new production.
“The fact that prices have not come under any noticeable pressure of late points to a shift in sentiment,” Commerzbank said on Tuesday.
“This may be related to the fact that most of the ‘shaky hands’ have withdrawn from the market by now,” the bank added.
The group’s efforts to rebalance the market have been undermined by rising production from Libya and Nigeria, which are exempt from an output-cutting agreement. Libya is pumping around 1 million bpd of crude, a four-year high.