Oil. Picture: REUTERS
Oil. Picture: REUTERS

Singapore — Oil prices were stable on Tuesday, supported by strong consumption but weighed by high supplies from producer club Opec and also the US.

Brent crude futures, the international benchmark for oil prices, were at $48.55 a barrel at 1.30am GMT, up 13c, or 0.3%, from their last close.

US West Texas Intermediate (WTI) crude futures were at $46.12 a barrel, up 10c, or 0.2%. In a sign of strong demand, data on Monday showed refineries in China increased crude throughput in June to the second highest on record.

Despite this, oil markets have struggled with oversupply since 2014, resulting in a more than 50% fall in prices since then.

A deal by Opec with Russia and other non-Opec producers to cut supplies by about 1.8-million barrels a day between January this year and March 2018 has so far not led to the tighter market and higher prices that producers have hoped for.

That is because supplies from within Opec remain high largely due to rising output from Nigeria and Libya, two Opec states exempt from the pact, and increasing US production.

Ecuador, a small producer within Opec, also said on Tuesday that it was not complying with its production cut of 26,000 barrels a day due to the country’s fiscal deficit which is expected to hit 7.5% of GDP this year.

Oil Minister Carlos Perez said that Ecuador was cutting only about 60% of that figure, putting current output at 545,000 barrels a day.

"We are not meeting the quota imposed on us because of the obvious needs the country has," Perez said.

Reuters

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