Oil Update: Oil Prices rise as Iraq hints at OPEC Cut Extension

Prices for oil rose in the international markets on Wednesday as Iraq’s oil minister hinted that the country is considering output cuts in line with the OPEC deal. Iraq and Ecuador are some of the few member countries who made lenient cuts owing to the domestic strife and economic condition within the countries.

U.S. West Texas Intermediate (WTI) crude futures were up 33 cents, or 0.7 percent, at $49.81 a barrel at 0419 GMT. Brent crude futures climbed 23 cents, or 0.4 percent, to $55.37.

Iraqi Oil Minister informed that the country is currently considering extending or even deepening supply cuts to curb a global glut. Alternates currently being considered by OPEC members include an extension into cuts by much more volumes or even extending the cuts beyond March. Some producers are of opinion that the cuts should be deepened and prolonged into the coming future beyond March next year as agreed upon.

However, the analysts anticipate that market demand is not expected to increase anytime soon. No one forecasts the crude demand to increase in the 4th quarter, which prompts the suppliers to tighten output to offset the declining demand. The price raise will not come as easy as expected, considering numbers for US Shale output from US EIA continue to report a consecutive 10 month increase during the last ten months.

Crude inventories rose by 1.4 million barrels in the week to Sept. 15 to 470.3 million, compared with expectations for an increase of 3.5 million barrels. Crude stocks at the Cushing, Oklahoma, and delivery hub rose by 422,000 barrels, API said.

Official figures on stockpiles and refinery runs will be released by the U.S. Department of Energy later on Wednesday.