Oil hovered unchanged above $62 a barrel today as traders took pause from a more than $1 rally on Opec compromise deal to cut production from February.
Meeting in Abuja, Nigeria, yesterday, Opec settled on a second output cut of 500,000 barrels per day (bpd), on top of the 1.2 million bpd reduction agreed in October, but it opted to wait until after the peak of winter demand to implement the new curbs.
US light, sweet crude was unchanged at $62.51 a barrel by earlier this morning, having leapt $1.14 a barrel in a second day of gains yesterday as Opec's action proved more definitive than some traders had expected in the lead-up to the meeting, when some Opec ministers said they saw no need for further action.
Analysts said Opec's deal appeared to be a compromise between price hawks who feared swollen stockpiles could cause prices to slump in the second quarter and others who worried that an immediate cut could leave markets short at the height of winter, causing prices to spike and damaging the global economy.
With a Reuters survey showing Opec only met about two-thirds of its initial cut-backs, some analysts doubted whether fresh limits would be effective in supporting prices that remain under pressure from US inventories and mild winter weather.
US crude oil stocks fell a sharper-than-expected 4.3 million barrels last week but still stood at their highest since 1998 for this time of year.