Domingo, 22 Octubre, 2017

OPEC panel looking at deepening, extending oil cuts

A man walks in front of Novokuibyshevsk refinery near the city of Samara A man walks in front of the Novokuibyshevsk refinery near the city of Samara
Manuel Armenta | 19 May, 2017, 19:13

The small move higher Tuesday put both Brent and U.S. futures on track to rise for a fifth day in a row.Kuwait's oil minister, Essam al-Marzouq, backed the previous day's agreement by Saudi Arabia and Russian Federation on the need to extend a crude output cut by OPEC and other producing countries of 1.8 million barrels per day (bpd) until the end of March next year.

Analysts said, speculators enlarged positions as OPEC members supported Saudi Arabian and Russian pledges to extend supply cuts, which mainly influenced crude prices at futures trade here.

Since the start of March, the Brent price has swung from more than $56 a barrel to less than $47 as opinion has swayed over whether cuts by oil cartel Opec and other producers would offset rising United States output.

Brent crude LCOc1 was down 18 cents, or 0.3 percent, from its last close at $52.03 per barrel at 0244 GMT.

Up for final discussion there is whether to extend the current six-month production-cut deal beyond the mid-2017 expiration, and if so for how long and whether the reductions should be increased. The market is about priced for an extension of supply cuts next week, although there is possibility of some uncertainty about whether it would be for six or nine months, stated Danske Bank.

Though investors aren't liable to make big bets ahead of the meeting, oil could get a kick later Friday when Baker Hughes' weekly US rig-count data are released.

US crude oil CLc1 was up 29 cents, or 0.6 percent, at $49.64 a barrel, highest since April 26.

Crude oil exports from Saudi Arabia rose by 275,000 barrels a day in March from February and stockpiles rose, official data showed late on Thursday.

That hope, despite OPEC's consistently strong adherence to its pledged output reduction and the non-OPEC bloc's steadily improving discipline since January, has been tamped down by anxiety over the slower-than-anticipated fall in bloated oil inventories in the Organization for Economic Cooperation and Development countries and fear that USA oil production is on a trajectory to nullify the coordinated restraint of the OPEC/non-OPEC producers. Accounting for that means OPEC would need to revisit and whittle down, if necessary, the participating countries' quotas through the duration of the extension.

Market watchers are growing more confident that OPEC, Russia and other big producers will extend cuts of nearly 1.8 million barrels per day (bpd) until the end of March 2018, Reuters reported. The U.S. Energy Information Administration said inventories fell 1.8 million barrels in the week to May 12 to 520.8 million barrels.

Oil prices fell on Thursday on signs that the market remained well supplied with crude despite efforts by OPEC and other big exporters to curb production and support prices.