Oil prices edge up as Kuwait cuts supplies by more than expected
Oil prices edged up on Friday after market sources said Kuwait had told customers it was cutting supplies by more than initially expected from January as part of a coordinated effort by oil producers to drain a global glut.
International Brent crude oil futures were trading at $54.22 per barrel at 0114 GMT, up 20 cents, or 0.37% from their last settlement.
US West Texas Intermediate (WTI) crude futures were up 24 cents, or 0.47%, at $51.14 per barrel.
The slightly higher prices came after Kuwait, a member of the Organisation of the Petroleum Exporting Countries (OPEC), notified customers that it would cut supplies from January as part of an effort by OPEC and other producers led by Russia to cut production by almost 1.8 million barrels per day (bpd) in order to reduce a fuel supply overhang that has dogged markets for over two years.
ALSO READ: Oil prices fall after Fed hike, but tighter market looms
Kuwait Petroleum Corporation (KPC) already said on Tuesday that it had officially notified its customers of a cut in their contractual crude oil supplies for January, in line with a deal with OPEC to reduce production.
Traders said that market prices rose as KPC appeared to be cutting supplies more than initially expected.
"Prices recovered as news emerged that Kuwait was said to be making bigger production cuts to US and European customers," ANZ bank said on Friday.
Most exporters have a so-called operational tolerance under which they can reduce or increase their contracted exports to clients with little notice.
Market sources said that KPC had informed clients that it was cutting supplies beyond the operational tolerance.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
08:50 AM IST