SINGAPORE (Reuters) – Oil hovered below $58 a barrel on Tuesday, after it slid $2 the previous day on signs OPEC will keep output stable when it meets in March.
U.S. crude stood 6 cents up at $57.87 a barrel at 0810 GMT, after sliding $2.08 or nearly 3.5 percent on Monday. London Brent crude rose 21 cents to $56.81 a barrel.
Several OPEC ministers have said there will be no need for more output cuts to add to pledged reductions of 1.7 million barrels per day, with Saudi Arabia’s oil minister Ali al-Naimi saying the market was in better balance.
The market was led lower on Monday by heating oil futures, as a lack of further supply reductions would come at a time of fading U.S. winter fuel demand, despite a recent cold snap that has cut inventories in the world’s top consumer.
“OPEC is not likely to cut production so it would be difficult to see a big gain in oil prices,” said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures Ltd.
Trade sources have said Saudi Arabia, the world’s top crude exporter, will keep supplies steady to global oil majors in March, though Japanese refiners confirmed on Tuesday that the kingdom will lift March supplies to Asia.
While analysts say non-OPEC supply is not increasing as quickly as expected, a U.K. oil industry survey reported on Tuesday that oil and gas supplies from Britain will rise this year for the first time since 1999.
Combined oil and gas output should rise by 200,000 barrels of oil equivalent per day (boepd) to 3.15 million boepd.
A Reuters poll of analysts expects U.S. crude stocks to have risen 1.4 million barrels last week in government data due on Wednesday, as imports increased. S]
U.S. distillate stocks, including heating oil, are expected to show a sharp decline of 4.4 million barrels after a cold spell boosted demand.
Anxiety over Iran’s nuclear program is still a supportive factor for oil prices, traders said.
EU leaders agreed to implement U.N. sanctions to keep pressure on Tehran, although they said on Monday Iran was showing “new ambition” to negotiate an end to a nuclear row with the West and the door was open for new talks.