OPEC signals cuts extension, oil traders ponder response

OPEC signals cuts extension, oil traders ponder response

OPEC signals cuts extension, oil traders ponder response

The rise came after steep falls last week on the back of ongoing high supplies from countries that aren't participating in the cuts, including the US where output is soaring.

The Organization of the Petroleum Exporting Countries, of which Saudi Arabia is the de-facto leader, and other producers including Russian Federation pledged to cut output by 1.8 million barrels per day (bpd) in the first half of the year to boost the market.

Brent, the worldwide crude benchmark, gained 0.5% to $49.59 per barrel while West Texas Intermediate, the U.S. benchmark, rose 0.6% to $46.68 per barrel at the time of writing.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery ticked up 72 cents to settle at $49.10 a barrel by close of trade.

"Given recent increases in USA production, markets are likely to take comfort from an agreement that lasts long enough to allow the market to move towards balance and reduce inventory", said Ric Spooner, a chief market analyst at CMC Markets.

Khalid-al Falih, the Saudi energy minister said on the sidelines of a conference on Monday that he expected the Opec-led group of producers to extend the production curbs now in place until at least the end of the year, the Financial Times reported.

Russia's energy chief supports extending last November's deal by the world's largest oil producers to rein in their combined output.

He said a deal on cutting output could extend early into next year. "OPEC members have no choice but to talk up prices by signalling an extension to the production cuts agreement".

Oil prices fell on Tuesday, surrendering earlier gains, rattled by concern over slowing demand and the rise in US crude output that has shaken investors' faith in the ability of OPEC to rebalance the market. However, with hedge funds turning bearish and oil prices giving up most of their post-agreement gains last week, the need for a clearer signal has become urgent.

Opec producers are set to meet later this month but say that decreasing supply to increase prices could actually backfire.

OPEC agreed to slash the output by 1.2 million barrels per day from January 1.

The ongoing production curb deal may be extended to the last half of the year and possibly to the next year.

For the week to May 2, investors cut bullish bets on Brent to the lowest level since late November, while hedge funds and money mangers also cut gross long positions in USA crude futures to the lowest since early November.

Recommended News

  • Missouri Valley Conference invites Valparaiso to join conference

    Missouri Valley Conference invites Valparaiso to join conference

    The MVC is the second-oldest continually active conference in college athletics (only the Big Ten has existed longer). Valparaiso is a private school, giving the MVC a balance of five public and five private moving forward.
    Microsoft quickly fixes 'crazy bad' Windows bug

    Microsoft quickly fixes 'crazy bad' Windows bug

    In trying to remove malware from the machine, Windows Defender could give it a foothold into the system. The vulnerable version of MMPE is 1.1.13701.0, and the first with the fix implemented is 1.1.13704.0.
    Oil price under pressure amid over-supply worries

    Oil price under pressure amid over-supply worries

    The cuts in production resulted in a significant rally in oil prices , with Brent trading as high as $56 per barrel in February. Pugh believes Opec and Russian Federation are likely to extend the cuts by at least three months at the meeting.
  • Trump to hold crunch meeting on Paris climate deal

    Trump to hold crunch meeting on Paris climate deal

    Today, White House advisors postponed a "key meeting" to discuss America's involvement in the Paris Agreement, Politico reports . Some fear a US U-turn would dampen enthusiasm among other signatories to increase their emissions-cutting targets.

    Newell Brands Inc (NWL) Receives Buy Rating from Wells Fargo & Co

    The diversified consumer-products company said that revenue jumped 148% to $3.27 billion, beating expectations of $3.21 billion. Currently, the stock carries a price to earnings ratio of 0, a price to book ratio of 1.52, and a price to sales ratio of 6.03.
    Le Pen sees French presidential vote 'surprise'

    Le Pen sees French presidential vote 'surprise'

    Returning to the franc is part of Le Pen's platform, but she has recently softened her tone to attract voters. A Harris survey saw Macron going on to win the run-off against her by 64 percent to 36.
  • Residents linger despite fire evacuation orders

    Putnam said in a news release that almost 125 active wildfires were burning in Florida as of Monday morning. Firefighters with tractor plows worked to carve a path of bare soil around the town to keep the flames away.
    50000 evacuated in German city after 5 WWII bombs uncovered

    50000 evacuated in German city after 5 WWII bombs uncovered

    On 9 October 1943, an especially deadly night, 1,245 people were killed and 250,000 left homeless by 261,000 bombs. The thousands of people being evacuated from the city will have the chance to attend events.

    Trump savors win as House passes Obamacare repeal

    It would slash funding for Medicaid, the program that provides insurance for the poor, and roll back much of Medicaid's expansion. Under Obamacare, they could only charge up to three times more. "Make no mistake about it", Trump said.
  • Emergency declared at Hanford nuclear site in Washington state

    Emergency declared at Hanford nuclear site in Washington state

    Department of Energy said the collapse covered about 400 square feet (37.1 square meters) instead of the 16 square feet (1.4 square meters) first reported.

    Trump denounces 'dangerous anti-Semitism' in Holocaust Remembrance Day remarks

    "Denying the Holocaust is only one of many forms of risky anti-Semitism that continues all around the world", the president said. The President said the US will "stamp out hatred" - despite the accusations facing him and members of his White House staff.
    Everest braces for record number of summit attempts

    Everest braces for record number of summit attempts

    Having been born in the mountains, Mr Sherchan was accustomed to the high altitudes and low oxygen levels of the Himalayas. The best month to climb Everest is May, when there usually are several periods of favorable weather on the summit.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.