Investing.com - Sentiment in oil markets so far this year has been torn between hopes that oversupply may be curbed by output cuts announced by OPEC producers and ongoing indications of a rebound in U.S. shale production.
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 members increasingly favor extending the output curb beyond June to balance the market, sources within the group recently said, although they added that this would require non-OPEC members such as Russia to also step up their efforts.
A joint committee of ministers from OPEC and non-OPEC oil producers will meet in late April to present its recommendation on the fate of the pact. A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.
This comes as the number of active U.S. rigs drilling for oil rose by 21 last week, according to oilfield services provider Baker Hughes, the tenth weekly increase in a row. That brought the total count to 652, the most since September 2015.
Meanwhile, the U.S. Energy Information Administration said on Wednesday that crude supplies rose by 867,000 barrels last week to yet another all-time high of 534.0 million.
It was the 12th weekly build in U.S. stockpiles in the past 14 weeks, feeding concerns about a global glut.
The view among many oil traders is that higher U.S. shale output could easily wipe out OPEC’s efforts to remove surplus barrels.
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