OPEC to Look at Extending Oil Production Cuts

But the fall in crude oil prices to less than $50 a barrel having hit $60 a barrel at the onset of production cut, has dimmed the hope of producers getting better oil revenue this year.

Compliance with the supply-cut deal was 94% in February among Opec and non-Opec oil producers combined, Russian Energy Minister Alexander Novak said.

Iranian Oil Minister Bijan Zanganeh told the news agency that OPEC members are likely to extend the deal, which is scheduled to end in June this year.

The reason for this change of wording was not immediately clear.

Physical fundamentals remained weak, however, with soaring USA output undermining efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to curb production to rein in a global fuel supply overhang and prop up prices.

Six OPEC members and Oman backed an extension, with Kuwait saying it should be for six months. US crude was down 84 cents at $47.13. US crude oil output has already risen 8.3 percent since mid-2016 to 9.13 million barrels per day (bpd).

"A number of bullish developments are helping oil regain some poise this morning, chief among which is the latest disruption in Libya", PVM analysts said in a report.

USA crude was down 33 cents at $47.63 a barrel, a 0.7 percent drop, as of 1:56 p.m. EDT. If so the DailyFX webinars are for you.

The agreement to cut 1.8 million barrels per day, which came into effect on January 1, 2017, was for six months and is extendable for an additional six months, depending on the status of supply and demand, including global inventories.

That agreement, which provided an initial boost to crude prices, may be extended for another six months after ministers from OPEC and non-OPEC producers agreed on March 26 agreed to conduct a review.

Dennis Gartman, founder and editor of the daily commentary, The Gartman Letter, said the longer term outlook was for ongoing low oil prices.

It seems that even a maximum compliance rate won't change prices much, as US inventory builds and rising production from the shale patch continue to offset the cuts already made by OPEC and its partners.

Prices for front-month Brent crude futures LCOc1 , the global market benchmark, gained 55 cents to $51.30 per barrel by 1315 GMT (9:15 a.m. ET).

US crude production expanded for a fifth week to 9.13 million barrels a day last week, the longest run of gains since January 2016, according to Energy Information Administration data.

  • Zachary Reyes