New York, US (BBN) – Crude oil prices gave up early gains in Asia on Monday after a weekend meeting that saw some promise for the extension of a coordinated output cut by OPEC and non-OPEC key producers.
At the weekend, a joint committee of ministers from OPEC and non-OPEC oil producers has agreed to review whether a global pact to limit supplies should be extended by six months. Oil sector analysts said the lack of an immediate extension could drag on crude prices, reports
US West Texas Intermediate crude for May on the New York Mercantile Exchange eased 0.19 per cent $47.88. Elsewhere, on the ICE Futures Exchange in London, Brent oil for May delivery fell 0.04 per cent to $50.78 a barrel.
In the week ahead, market participants will eye fresh weekly information on US stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
Last weeek, oil futures settled higher on Friday, but posted a weekly loss of around 2 per cent as the market weighed rising shale production and record-high stockpiles in the U.S. against efforts by major producers to cut output to reduce a global glut.
Data from oilfield services provider Baker Hughes on Friday revealed that the number of active US rigs drilling for oil rose by 21 last week, the tenth weekly increase in a row. That brought the total count to 652, the most since September 2015.
Meanwhile, the US Energy Information Administration said on Wednesday that crude oil inventories rose by 5.0 million barrels last week to an all-time high of 533.1 million, feeding concerns about a global glut.
Oil has fallen sharply this month amid concern that the ongoing rebound in US shale production could derail efforts by other major producers to rebalance global oil supply and demand.
OPEC agreed in November last year to curb its output by about 1.2 million barrels per day between January and June. Russia and 10 other non-OPEC producers have agreed to jointly cut by an additional 600,000 barrels per day.
In total, they agreed to reduce output by 1.8 million barrels per day to 32.5 million for the first six months of the year, but so far the move has had little impact on inventory levels.
OPEC’s latest monthly report showed global oil stocks in January rose to 278 million barrels above the five-year average.