Oil prices set for biggest weekly drop in a month

Earlier this month, Novak said that the ministry will start discussing Russia's possible participation in the production cut extension that is now being negotiated by OPEC members in order to increase prices further, having failed to push them up to $60 a barrel since the start of the year.

Mr Al Falih had previously been reluctant to commit to a deal extension because of worries that other producers would get a "free ride" from the kingdom's efforts, while his country suffers economically from the cuts it has made.

"It's a still game of very narrow trading ranges between these mixed drivers", said ABN AMRO's senior energy economist Hans van Cleef.

"We think an extension is highly likely, with a growing OPEC consensus in support of that policy, but the market seems to be attributing last week's decline to the lack of a firm agreement", Tim Evans, Citi Futures' energy futures specialist, said in a note.

Brent crude futures were at $52.99 per barrel at 0323 GMT, flat from their last close.

As the physical market for Brent weakens, Saudi Arabia said on Thursday that some oil producers have reached a tentative agreement to extend the current round of output cuts.

West Texas Intermediate for June delivery dropped US$1.07, or 2.1 per cent, to US$49.64 a barrel at 11:12 a.m. on the New York Mercantile Exchange.

Saudi Arabia's oil minister Khalid al-Falih suggested at an oil conference on Thursday that production cuts may need to continue.

To determine the health of oil markets, analysts say it is important to monitor inventory levels.

On Wednesday, crude prices tumbled more than 3.5 percent as USA government data showed domestic crude stocks fell less than expected in the latest week and gasoline stocks posted a surprising 1.5-million-barrel build.

Russian Federation has reduced its oil output by 250,000 barrels per day as of April as compared to the output recorded in October 2016, the country's Energy Minister Alexander Novak told reporters Apr. 21.

Barkindo said that "March compliance figures are more robust than February figures" and the technical committee meets in Vienna today to discuss the progress of the agreement. "So, I'm sure they will want to complete the job". "The situation is getting more and more stable and there's less volatility on the market".

Bloomberg calculations using the agency's supply and demand projections indicate that, by the time OPEC's accord expires in June, stockpiles will be roughly back in line with their end-December level and still about 200 million barrels above the five-year average.

But "until the trend, and specifically the pace of rising USA production, slows or reverses, it will be very hard for oil prices to sustain any material gains in the medium term", said Tyler Richey, co-editor of the Sevens Report.

  • Zachary Reyes