Global oil prices steadied on Monday as market players weighed last week’s news of a planned OPEC production cut with doubts over its implementation and effectiveness at wiping out a crude supply overhang.
December Brent crude futures remained above $50 a barrel in European trading but by 1400 GMT were flat on the day at $50.19 a barrel, after erasing earlier slight gains. U.S. crude futures were $48.23 a barrel, a cent lower.
Europe and Asia’s largest markets, Germany and China, were both shut for public holidays on Monday, limiting trade.
The Organization of the Petroleum Exporting Countries said last week it would cut output to between 32.5 million barrels per day (bpd) and 33.0 million bpd from about 33.5 million bpd, with details to be finalised at its policy meeting in November.
Brent crude oil prices, most sensitive to any OPEC deal, have climbed more than 8 percent since the planned cuts were announced on Wednesday despite scepticism over the effectiveness of the deal in eroding the global surplus.
“Naysayers will undoubtedly fade the headline (of the output cut) and deem the agreement typical OPEC noise, yet at a minimum it means that OPEC has bought themselves a price floor for at least the next two months heading into the November meeting,” analysts at RBC Capital Markets said in a note.