Oil prices steady, supported by OPEC tightening supplies

Oil prices were broadly steady on Friday as surging U.S. supply and concerns of a global economic slowdown were offset by falling OPEC output.

International Brent crude futures were at $66.39 per barrel at 1231 GMT, up 8 cents from Thursday’s settlement.

U.S. West Texas Intermediate (WTI) crude oil futures were at $57.38 per barrel, up 16 cents.

“Oil prices are finely balanced in today’s trading session,” senior Interfax Energy analyst Abhishek Kumar said.

The 14-member Organization of the Petroleum Exporting Countries pumped 30.68 million barrels per day (bpd) in February, a Reuters survey showed on Friday, down 300,000 bpd from January and the lowest OPEC total since 2015.

In Venezuela, oil exports have plunged by 40 percent to around 920,000 barrels per day (bpd) since the U.S. government slapped sanctions on its petroleum industry on Jan. 28.

OPEC, of which Venezuela is a founding member, is leading efforts to withhold around 1.2 million bpd of supply from the market to prop up prices. Venezuela is exempt from the cuts.

“OPEC and its 10 allies are doing their job and this time they are stubborn,” London-based brokerage PVM said in a note, referring to the supply restrictions which have been in place since the start of the year.

The fall in OPEC production comes at a time when the United States is pumping oil at record rates.

The U.S. Energy Department said on Thursday it was offering up to 6 million barrels of crude from national emergency stocks to raise funds to modernize U.S. strategic oil reserves.

Canada’s main oil-producing province of Alberta on Thursday raised the amount of crude that companies can produce in April to 3.66 million barrels per day, an increase of 100,000 bpd from the limit imposed in January.

On the demand side, a Reuters poll showed analysts expect global fuel demand to dip this year in the face of a broad economic slowdown.

China’s February factory activity fell for a third month as the world’s second-largest economy continued to struggle with weak export orders, a private survey showed on Friday.

The weakness is also being felt across the wider region. South Korea’s exports contracted at their steepest pace in nearly three years in February as demand from China cooled further.

Despite this, fuel consumption, especially in Asia’s developing economies which are key drivers of global oil demand, is so far holding up.

India’s diesel consumption, for example, is expected to rise to a record this year amid economic growth of around 7 percent.