Crude Oil Prices Edge Higher as Extension of Production Limits expected

Oil prices rose again on Tuesday following a meeting led by the Organization of the Petroleum Exporting Countries (OPEC) where major oil producers, precisely from the Middle East, affirmed that their mutual output cuts deal was still in play.

The rising crude oil prices, which were trading close tothe five-month highs, have stimulated more drilling in the U.S. major oil natural springs.

Meanwhile, investors lie in wait for the release of the weekly report from the American Petroleum Institute onthe U.S crude oil stock to evaluate the effects of the recent hurricanes on demand and supply. The weekly data is scheduled for release at 2030GMT.

A more comprehensive record on the same will be released on Wednesday by the Energy Information Administration along with projections of a possible oil stockpile gain.

Brent Crude futures, responsible for standardizing oil prices outside the United States, was up by about 0.3%trading at $55.54 per barrel. The U.S. West Texas Intermediate (WTI) crude futures on the other hand was up by 34 centsto $50.25.

Away from the U.S., Natural gas futures maintained its peak at $3.147 per million British thermal units while Gasoline futures had a small variance with $1.667 per gallon.

Since OPEC released their forecast data last week estimating that there would be more demand for crude oil next year, different opinions have been raised, with the International Energy Agency lifting its 2017 demand stance.

The head of commodity research at LBBW, Frank Schallenberger, stated that the optimistic trend for crude oil is mainly triggered by the continued weakening of the U.S dollar and the three-year low drop in the Saudi Arabian exports.

Additionally, Iraq, which is OPEC’s second largest oil producer, said that they were currently looking to extend their contract with OPEC beyond March 2018 and increase their output supply cut.

This proposal came after sanctioned export data showed that the Saudi Arabian oil exports have consistently dropped for the last three years. A meeting between OPEC and investors from other nations has been scheduled for Friday to discuss the supply pact and a possible extension of the production limits.

OPEC has joined with other producers such as Russia in an attempt to reduce global oil stocks and achieve market balance by reducing output by 1.8 million barrels per day until the oil production cuts expire in March next year.

Meanwhile, the U.S. government is working on buoying drilling activities to increasing its shale outputfollowing the destructive storm activity that has been going on in the country recently. According to the United States Energy Information Administration, the country expects to increase its output by 79000 barrels per day (bpd) across seven shale.

Traders are closely watching the impact of Hurricane Maria that struck the Caribbean on Tuesday. Though the storm is far from the Gulf of Mexico (the heart of U.S oil production), it could still disrupt shipping to and fro the country and reduce oil demand.