Oil prices were flat on Tuesday as the market considered the OPEC supply alongside weakening global demand and the restart of Libya’s biggest oilfield.  BP photo.

OPEC announced it will likely extend its supply pact which has boosted oil prices 20 per cent this year

Oil prices were steady on Tuesday as the OPEC supply cut agreement balanced weakening global demand as well as the restart of Libya’s largest oilfield.

The trade war between the United States and China continued to weigh on the market after US Secretary of State Mike Pompeo said President Donald Trump would reject any deal that is not perfect.

“Oil is still waiting for a deal to come back to table with China,” Phillip Streible, senior commodities strategist at RJO Futures told Reuters.

By 2:21 p.m., EST, benchmark Brent was up 19 cents to $65.86/barrel and US West Texas Intermediate rose 7 cents to $56.66/barrel.

The OPEC+ supply cut is helping underpin oil prices.  On Monday, Russia said it would speed up its output cuts this month.  As well, OPEC announced it will likely extend the agreement which has helped boost oil prices by about 20 per cent since the beginning of the year.

“That’s what holding prices, and that will ultimately drive prices higher,” Streible said.

Meanwhile, the restart of Libya’s 315,000 barrels per day (b/d) El Sharara oilfield put pressure on oil prices.  The oilfield has been shuttered since December.

“The oil market will… be slightly oversupplied again unless production is cut further or unscheduled outages occur elsewhere,” Reuters reports Commerzbank said in a report.

Analysts polled prior to the release of weekly data on US crude inventories say they expect crude stockpiles to have risen by 400,000 barrels in the week ending March 1.

The American Petroleum Institute will release its data at 4:30 p.m., on Tuesday and the US Energy Information Administration will release its report Wednesday morning.

The Chinese government forecasts economic growth to be between 6.0 to 6.5 per cent in 2019, slightly lower than 6.6 per cent growth reported in 2018.  The slowdown in growth is expected to cut fuel demand.