SINGAPORE (Reuters) – Oil firmed above $61 on Wednesday as dealers balanced an expected swelling in robust U.S. winter fuel stocks against a warning from producer cartel OPEC that it may take action to stabilize tumbling prices.
U.S. crude rose 35 cents to $61.36 per barrel by 0719 GMT, but easing from Monday’s high of $62. London Brent edged up by 35 cents to $60.47.
“It is difficult to push prices up when the fundamentals show that there are ample stocks,” said Tobin Gorey, a commodities analyst at Commonwealth Bank of Australia.
A Reuters poll ahead of Wednesday’s U.S. government data found that U.S. stocks of distillates, which include heating fuel, were projected to have risen by 2.3 million barrels last week. Inventories already stand at their highest level since January 1999.
Crude oil supplies were forecast to have declined by 1.7 million barrels last week, while gasoline rose by 500,000 barrels, the survey showed.
The bulging fuel stocks, easing U.S. economic growth and diminishing political tensions over Iran’s nuclear stand-off have sent oil prices diving about 20 percent from July’s peak of $78.40 a barrel, their steepest drop since the Gulf War in 1991.
“OPEC’s comments have not triggered a spike in prices because many in the market expect the group to cut supplies only when U.S. crude falls below $60,” Gorey added.
The Organization of the Petroleum Exporting Countries (OPEC), which pumps a third of the world’s oil, said on Tuesday that lower oil prices could harm investment in the industry.
“We are already talking among ourselves in the OPEC fold. The price is very low, and it’s not good for investors,” OPEC President Edmund Daukoru told Reuters on Tuesday.
Asked whether OPEC would cut production at its next ministerial meeting in December, Daukoru said: “Something needs to be done to steady the price. That’s all I can say.”
Oil prices, which touched a six-month low on Monday, rose to a high of $62 on Daukoru’s comments but then eased back.
Saudi oil minister Ali al-Naimi, who steers the policy of the world’s biggest exporter, said last week, when prices were above $62 a barrel, that prices were “reasonable.”
Some analysts say that the glut in U.S. inventories, along with a forecast warmer-than-usual winter, could push oil prices below $60 in the next two months.
“Everyone is looking for the window to take a long position but no one has any confidence that prices have already hit the bottom,” said Ken Hasegawa, a manager at Himiwari CX, Japan’s largest commodities futures broker.
Adding downward pressure to prices, BP said it was increasing production at its Prudhoe Bay oilfield in Alaska and was on track to hit 400,000 barrels per day of production by the weekend.