Oil prices steady as OPEC+ mulls supply cut

An oil pump jack pumps oil in a field near Calgary, Alberta, Canada on July 21, 2014. REUTERS/Todd Korol

LONDON, Aug 25 (Reuters) – Oil prices steadied on Thursday as producer group OPEC+ raised the prospects of curbing oil supplies while the prospect of an agreement that could return sanctioned Iranian oil exports to the market weighed.

Brent crude eased 2 cents to $101.20 a barrel by 1033 GMT, while U.S. West Texas Intermediate crude was down 22 cents, or 0.2%, at $94.67 a barrel.

Comments on Monday by Saudi Energy Minister Prince Abdulaziz bin Salman about a disconnect between the futures and physical markets in which he flagged the possibility that OPEC+ could cut production have helped push oil prices to three-week highs. read more

“The suggestion that the price did not align with fundamentals and that OPEC+ could cut output has clearly had the desired effect,” Oanda analyst Craig Erlam said.

“It may also make the chance of a move back below $90 in the near-term hard to come by unless a nuclear deal is agreed upon and OPEC+’s appetite for cuts put to the test,” he added.

Talks between the European Union, the United States and Iran to revive the 2015 nuclear deal are continuing, with Iran saying it had received a response from the United States to the EU’s “final” text to resurrect the agreement. read more

Falling U.S. crude and product stockpiles also added to the upward pressure on prices. Oil inventories fell by 3.3 million barrels in the week to Aug. 19 at 421.7 million barrels, steeper than analysts’ expectations in a Reuters poll for a 933,000-barrel drop. read more

The bullish impact was countered by a drawdown in gasoline inventories that was less than expected, reflecting tepid demand.

U.S. gasoline stocks fell by 27,000 barrels in the week to 215.6 million barrels, compared with earlier expectations for a 1.5 million-barrel drop.

Additional reporting by Jeslyn Lerh in Singapore; Editing by Emelia Sithole-Matarise

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