Oil prices finished mixed on Monday after OPEC reported a fall in October member output, but a U.S. government report showed expectations for a monthly rise in domestic shale-oil production. Ahead of a key meeting of oil producers on Nov. 30, the Organization of the Petroleum Exporting Countries said crude production from its members dropped by nearly 0.5% to 32.59 million barrels a day in October from a month earlier. OPEC also raised its forecast for oil demand this year and in 2018.

Meanwhile, a report from the Energy Information Administration revealed expectations for another monthly climb in U.S. shale-oil production from seven major U.S. oil plays, which are expected to see a rise of 80,000 barrels a day in December to 6.174 million barrels a day. The report has forecast increases in shale-oil output every month so far this year.

The U.S. benchmark, West Texas Intermediate crude for December delivery on the New York Mercantile Exchange, rose 2 cents, or less than 0.1%, to settle at $56.76 a barrel. The global benchmark, Brent crude for January fell by 36 cents, or 0.6%, to $63.16 on the ICE Futures Europe exchange.

“Overall, the market remains fairly well supported on the fundamental front, with inventories generally seeing steady net declines and OPEC expected to extend their efforts into 2018,” said Robbie Fraser, commodity analyst at Schneider Electric. Both benchmarks hit 28-month highs early last week, boosted by expectations OPEC and other major producers will agree at the end of the month to extend an agreement on output curbs beyond its March end-date. Last week also saw the market take on an added geopolitical risk premium, reflecting political turmoil within Saudi Arabia as well as growing tensions between the kingdom and Iran. “From a crude oil trading standpoint, the refusal of the market to break after an extended run and a weekend where there were no escalation in the conflict in the proxy war by Iran and Saudi Arabia is bullish,” said Phil Flynn, senior market analyst at Price Futures Group. “It shows that there are reasons to be very bullish oil other than geopolitical events, talk that oil from floating storage has drained and tight supply of oil for Asian and European refiners is showing that the global oil glut has all but gone away.”

Meanwhile, Fraser pointed out that while Saudi Arabia and Iran will enter this month’s formal OPEC meeting “at a recent low in terms of their relationship, politics have traditionally been set aside by OPEC in favor of mutual economic interest.” “Additionally, a major earthquake on the Iran-Iraq border yesterday continues to a major crisis for both countries to manage, though initial reports of heavily affected areas do not include major crude producing regions,” said Fraser.  

Among the products traded on Nymex, December gasoline fell 1.1% to $1.793 a gallon, while December heating oil  lost 0.1% to $1.932 a gallon.

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Fuel Manager Services Inc
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