North Dakota oil producers helped topple OPEC

Crude headed for the second week of gains amid a market consensus the Organization of Petroleum Exporting (OPEC) nations will extend a production cut that's put a floor under oil prices, outweighing a stubborn increase in the USA rig count for the 18th straight week to the highest level since April 2015.

Brent crude settled up $1.10, or 2.1 percent, at $53.61, the highest settlement for the global benchmark since April 18.

Most members support a proposal by Saudi Arabia and Russian Federation to extend supply cuts for nine months, Algerian Minister of Energy Noureddine Boutarfa said on Thursday. They hope the measure will drive oil prices to $60 per barrel or even more. There has also been speculation that OPEC may look to deepen cuts. Brent crude was up $1.02 at $53.53 at 1:22 p.m (1722 GMT) while USA benchmark crude oil was up 94 cents at $50.29.

"If the production cuts were to be extended, the participating countries would lose further market shares, which they are hardly likely to accept for any length of time", the report said.

Overall oil supplies remain ample, with large amounts of crude from the United States and other producers being shipped to the big consumer regions in northern Asia, undermining OPEC-led efforts to tighten the market.

Total US output will grow by 700,000 to 1 million barrels a day from the beginning to the end of this year, Diwan said in his presentation, the delegates said, asking not to be identified because the meeting was private. U.S. West Texas Intermediate WTI crude rose 78 cents, or 1.6%, to $49.44 U.S.

USA output "increased again in February by almost 200,000 b/d, and at 9.03 million b/d was the highest since March past year". This move would also increase supply in the markets.

OPEC and other producers are due to discuss an extension during an OPEC meeting on Thursday.

Its meeting precedes the gathering of OPEC and non-OPEC oil ministers on May 25 to decide whether to extend beyond June 30 their deal to reduce output. "So I think the people out here are excited about what the future holds, which might not have been what you would've said a few years back, so that's definitely the positive".

Crude inventories fell 1.8 million barrels for the week to May 12, to 520.8 million barrels. FXTM research analyst Lukman Otunuga said although Opec members may be commended on their ability to repeatedly boost the market on production cut talks, the effects could wear out soon.

  • Zachary Reyes