New York, US (BBN) – Crude oil prices edged higher in Asia on early Tuesday with comments from an annual gathering of key energy executives at policymakers in Houston this week making headlines on the output cut deal status, including from Russian Energy Minister Alexander Novak.
On the New York Mercantile Exchange crude futures for May delivery rose 0.06 per cent to $53.22 a barrel, reports
On London’s Intercontinental Exchange, Brent was last quoted at $55.95 a barrel.
Novak told the CERAWeek energy conference on Monday that Russia would move to comply with its pledges under an output cut pact to trim nearly 1.8 million barrels per day (bpd) from global markets in the first half of the year working with OPEC and other key producers.
But he said it is too early to say if the pact should be extended beyond June 30, but that Russia would meet its current commitment by the end of April, in remarks before industry executives at the annual industry gathering CERAWeek carried online.
Earlier, Russia’s Tass news agency said that Novak met his Saudi counterpart Khalid Al-Falih in the United States on Monday, without providing further details.
Compliance by Russia with the pact is at the center of sentiment as figures last week showed Russian crude oil production in February came in at 11.11 million bpd, mostly unchanged from January.
Russia is slated to average cuts of 300,000 bpd through June 30, but had said the first three months of the pact would see it at a 200,000 bpd reduction pace as it has already dialed back more than 145,000 bpd from an October baseline.
Going by the January start of the cut pact, Russia is at a 33 per cent compliance rate while OPEC is hitting 94 per cent, potentially setting the stage for a dispute among participants over adherence.
Later on Tuesday, the American Petroleum Institute will release its estimates of crude and refined prodyct stocks at the end of last week.
The figures ill be followed by official data on Wednesday from the US Energy Information Administration expected to show crude oil inventories up by 1.66 million barrels, while gasoline supplies are expected down 1.28 million barrels and distillates eased by 880,000 barrels.
Overnight, crude settled lower on Monday, after the International Energy Agency predicted a sharp increase in shale oil growth and a reduction in demand for European refined products.
It was a volatile session for market participants, as large moves in oil prices were driven by headlines.
Earlier during the session, oil prices advanced, after Jabbar Al-Luaibi, Iraq’s oil minister said that the Organization of Petroleum Exporting Countries (OPEC), would likely extend its production cuts into the second half of 2017.
Gains were short-lived as oil prices pulled back, after the International Energy Agency (IEA) said in a report US shale oil production may grow by 1.4 million barrels per day by 2022 with prices at about $60 barrel and pointed out that demand for European refined products may weaken.
US producers will contribute most of the growth in supplies outside OPEC through to 2022, the IEA said.
The IEA’s report, fueled concerns that rising US crude and shale production may curtail OPEC’s efforts to rebalance supply and demand in the industry.
Data from Baker Hughes last week revealed that the number of active US rigs drilling for oil rose by 7 to 609 rigs this week.
It was the seventh straight weekly increase while US crude inventories rose for an eight straight week to a record 520.2 million barrels the Energy Information Agency (EIA) revealed last Wednesday.
The build-up in US crude oil inventories to record high levels, overshadowed a Reuters survey last week that found OPEC cut its oil output for a second month in February, following a record high compliance level by OPEC members in January.