Oil remains steady after biggest monthly gain
Markets remain hopeful of the US and China signing a trade pact in Chile next month
Brent held steady above $61 per barrel on Monday as markets remained optimistic about the US and China making progress on their trade differences.
The European benchmark was down 0.37 per cent, trading at $61.79 per barrel at 3.08pm UAE time, while West Texas Intermediate was down 0.46 per cent at $56.40 per barrel.
Brent had closed at $62.03 on Friday, the highest level seen in a month.
On Saturday, China's commerce ministry released a statement noting that negotiators from Beijing and Washington had “agreed to properly resolve their core concerns and confirmed that the technical consultations of some of the text agreement were basically completed".
A trade pact between the world's two biggest economies, which have been embroiled in a tit-for-tat tariff war that has dragged on global economic growth, is expected to be signed in Chile next month.
Outgoing US energy secretary Rick Perry also signalled higher output from US shale basins during a visit to the UAE on Sunday.
The US, the world's top oil producer, is set to hit a record output of 13 million barrels per day by the end of the year, according to the Energy Information Administration.
However, analysts are less optimistic about shale's continued resilience in the face of a prolonged period of lukewarm prices and slowing investment in the sector.
Oil production from the US is expected to grow by less than 800,000 bpd in 2020, JBC Energy said in a note on Monday, a downward revision from an earlier estimate of 1 million bpd.
"While the Permian Basin is set to boost production further, we expect even outright declines for some shale areas such as Eagle Ford and Niobrara next year," the consultancy said.
Non-Opec producers other than the US that are not party to the ongoing Opec+ pact are expected to drive supply higher next year, JBC added.
"We see steady crude and condensate production growth of around 1.5 million bpd from non-Opec [producers], excluding supply from non-Opec cut agreement participants," the note said.
Norway's production ramp-up in Sverdrup, as well as Brazil's pre-salt output, are expected to be the main contributors to increased supply.
Opec+, an alliance led by Saudi Arabia and Russia, is cutting back 1.2 million bpd of production under its current supply pact, which is expected to hold until March 2020.
Updated: October 28, 2019 04:53 PM