Oil prices made modest progress this morning, steadying after losses over the past couple of days which followed data on U.S. inventories which showed them to be at record levels. High levels of imports, some locked in last year to take advantage of lower prices and more this year in anticipation prices may rise later in the year have combined with increased domestic production and soft gasoline demand to bloat stocks. However, this morning Brent crude added 12 cents to $55.77, a 0.2% increase, immediately prior to markets getting underway in London. WTI was up 7 cents, 0.13%, to $53.43.
OPEC sources reportedly told Reuters that current supply cuts of 1.8 million barrels a day, with compliance shown early this week to be at record levels of around 93%, could be extended. That would mean them continuing for longer than the 6-month period initially committed to, or even deepened. The willingness to push harder did however come with the caveat that it would happen only if "effective cooperation" was seen between OPEC members and other major oil producers that have committed to the deal, such as Russia. So far the main worry is Iraq, which has demonstrated only 40% compliance, significantly less than every other country and being compensated for by Saudi Arabia cutting beyond its own quota. Nonetheless, the apparent willingness to ensure efforts made so far will ultimately conclude in global supplies being rebalanced has halted the recent slide in prices.
Political uncertainty in the U.S., which has seen the volatile side of the Trump administration come to the fore once more in recent days, most notably through the forced firing of national security advisor Mike Flynn this week over illegal communication with Russia. The result has been gains for gold price this week. While spot gold prices were flat this morning at $1,238.29 oz., and futures down 0.2% to $1238.5, gold has gained around 0.3% over the course of the week, taking overall gains for 2017 to 7.5% despite the rally in equities.