🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

UPDATE 2-Oil prices climb on hopes output cuts will be extended

Published 19/05/2017, 01:59 pm
© Reuters.  UPDATE 2-Oil prices climb on hopes output cuts will be extended
LCO
-
CL
-

(Adds comment, updates prices)

By Aaron Sheldrick and Henning Gloystein

TOKYO, May 19 (Reuters) - Oil futures rose on Friday to the highest in nearly a month on growing optimism that big producing countries will extend output cuts to curb a persistent glut in crude, with key benchmarks heading for a second week of gains.

Brent crude LCOc1 was up 34 cents, or 0.7 percent, at $52.85 at 0358 GMT. The contract earlier rose to the highest since April 21 and is on track for a 4 percent climb this week, its second week of gains.

U.S. crude oil CLc1 was up 38 cents, or 0.8 percent, at $49.73 a barrel, highest since April 26. The contract is heading for a weekly increase of 4 percent.

Since the beginning of March, crude prices have swung from over $56 a barrel to under $47 as market participants were divided over the impact of rising output from the United States versus production cuts by the Organization of Petroleum Exporting Countries (OPEC) and other countries, including Russia.

But market watchers are growing more confident that OPEC, Russia and other big producers will extend cuts of almost 1.8 million barrels per day (bpd) until the end of March 2018. U.S. producers are not party to any agreements capping production.

As with other markets, concerns about U.S. President Donald Trump's agenda amidst investigations in Washington faded into the background.

"With the political turmoil easing in the U.S. overnight, the market will return to the fundamental drivers," ANZ said in a research note.

"This should see oil prices remain well bid, as OPEC continues to talk up a continuation of the production cut agreement," it said.

On May 25, leaders from OPEC and other producing countries will meet in Vienna to decide on output policy.

Rosneft, the largest oil producer in Russia, will meet agreements with OPEC on oil output reductions, the company's chief executive told reporters in Berlin on Thursday.

Still, there are signs that Saudi Arabia, OPEC's largest producer, is keeping markets well supplied.

Crude exports from Saudi Arabia rose by 275,000 barrels a day in March from February and stockpiles rose, official data showed late on Thursday. battle between bulls and bears is raging on oil," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

"On the one hand, you have traders who worry about the efficacy of OPEC's oil cuts on inventory levels. On the other, there are those who are focussed on the real drawdowns that have started to occur in US oil stocks over the past month or so."

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC: Is the oil market weary of OPEC promises?

CHART: Brent oil may gain more to $53.80

http://tmsnrt.rs/2qxdgAw CHART: U.S. oil may rise to $50.85

http://tmsnrt.rs/2rx2vgl

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.