Oil prices held steady Tuesday on the heels of seven-month lows, with investors remaining dubious about how effective the production cuts spearheaded by Saudi Arabia and Russia have been and will be.
Futures have skidded 17% since New Year’s, which is when the output-cap agreement went into effect. The deal’s stated objective has been bringing global crude inventories down to five-year averages.
But the results have been largely disappointing thus far.
Morgan Stanley pointed out that identifiable oil inventories — both oil and products in the Organization for Economic Cooperation and Development, China and selected other non-OECD countries — increased some at a rate of around 1 million barrels a day in the first quarter.
“OPEC still have a long way to go in rebalancing the market,” said Stuart Ive, a client manager at OM Financial.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July
recently traded up 0.2% at $44.27 a barrel in the Globex electronic session. August Brent crude