Oil price climbs as Opec offers early consensus on renewed deal

Oil prices rise on expectation of output cut extension

Oil prices rise on expectation of output cut extension

High U.S. gasoline stocks have fed some concern about demand in the United States, where consumer spending expectations hit a three-year low last month and vehicle sales have fallen year-on-year for four months in a row.

Investors should note that on November 30, 2016, the OPEC cut a deal, per which, the bloc would have cut production by about 1.2 million barrels a day from January (read: How Effective is the OPEC Deal for an Oil ETF Rally?).

Saudi Arabia's oil minister said he is confident that an agreement by oil producers to curb output and shrink a market glut will be extended into the second half of the year and possibly beyond. Aramco had previously maintained supplies to important Asian customers.

Supply from the 11 OPEC members with production targets under the accord - all except Libya and Nigeria - fell to 29.674 million bpd last month, according to figures from secondary sources that OPEC uses to monitor output.

The oil ministers of the two countries held a press conference in Baghdad where Iraqi Oil Minister Jabar Ali al-Luaibi said "there might be new ideas to be presented" at an OPEC meeting on May 25, without providing further details.

West Texas Intermediate crude oil traded up 1.6% at $46.94 a barrel after weekly US Energy Information Administration inventory data showed a bigger drawdown than expected.

The news agency reported that state-owned Saudi Aramco will reduce oil supplies to its Asian customers by almost seven million barrels next month as it is likely to witness a surge in domestic power demand over summer.

Global benchmark Brent crude was up 54 cents at $49.27 a barrel by 1102 GMT.

BMI said that "continued output growth. particularly in the US" would cap price upside gains from the supply cuts, adding that it expected average 2017 prices of $57 a barrel for Brent and of $53.75 a barrel for WTI.

Russian Federation also said it was discussing prolonging cuts with other producers beyond 2017. Atkinson said such a move will see the supply deficit become even bigger in the second half of the year.

The EIA forecast that USA oil demand for 2017 will grow 290,000 bpd, up from its previous forecast for 250,000 bpd growth.

The May report also changes to the EIA's earlier estimates for crude oil and refined product pricing for 2017.

The Organisation of Petroleum Exporting Countries (OPEC) has called on U.S. shale oil drillers to cut output for the prosperity of global economy.

Recommended News

  • Lakers turn attention to scheduling workouts with top players

    Lakers turn attention to scheduling workouts with top players

    Lonzo Ball's decision to skip a workout with the Boston Celtics, who hold the No. 1 pick, could have major financial implications. After the lottery ended, Pierce wrote on twitter: "And look what I leave behind for the Celts on my way out #1 pick".
    Cavaliers Sweep the Raptors to Advance to the Eastern Conference Finals

    Cavaliers Sweep the Raptors to Advance to the Eastern Conference Finals

    The way they were making shots, and they were well-guarded, you're going to have to score 117-118 points a night to beat them". If he chose to exercise his free agency and sign with another squad, a max deal could net him just over $150 million.
    Tottenham Hotspur Star Admits Team Feel

    Tottenham Hotspur Star Admits Team Feel "Guilty" After Loss At West Ham

    This season was important for all to see that football is not about one man or one player, it's about being strong as a unit. Tottenham's midfielder Eric Dier admitted his team's title aspirations are now highly unrealistic.
  • G7 pledges to make global growth more inclusive

    G7 pledges to make global growth more inclusive

    Steps taken by President Trump on trade and regulation since taking office have left foreign counterparts jittery. The issue will be discussed at the G7 summit in Taormina later this month, according to the Italian presidency.
    Deepika stuns the Cannes audience on her debut

    Deepika stuns the Cannes audience on her debut

    The 31-year-old actress let her long tresses loose, while opting for bold, dark lips and nails to compliment her attire. Accessorised with minimal jewellery and tie-up heels, Deepika wore her hair in a ponytail and looked uber-stylish.
    Xbox Live Free Multiplayer Event Offers Free Weekend of Online Play

    Xbox Live Free Multiplayer Event Offers Free Weekend of Online Play

    This event, titled the Multiplayer All-Access event, is on now until Monday, May 21st for both the Xbox One and Xbox 360. All progress made and achievements earned will transfer to the full game if purchased after the event is over.
  • NC jobless rate falls in April, 4.7 percent nears US average

    NC jobless rate falls in April, 4.7 percent nears US average

    The U.S. seasonally adjusted jobless rate fell to 4.4 percent, down from 4.5 percent in March and 5 percent in April 2016. The U-6 rate for Washington through the first quarter 2017 was 10 percent compared to the national rate of 9.5 percent.
    Senator calls for ejection of Turkish ambassador

    Senator calls for ejection of Turkish ambassador

    Turkey's president told the United States it will not join any military operations that include Kurdish fighters in Syria. What happened next has been described by the DC Police Department's Chief as a "brutal attack" on peaceful protestors.
    AT&T workers in California and Nevada call a three-day strike

    AT&T workers in California and Nevada call a three-day strike

    This weekend's strike comes almost two months after 17,000 AT&T workers in Nevada and California walked off the job. The workers would be joined in their protest by CWA members in AT&T's DirecTV and wireline businesses.
  • GOP candidate for FBI says no special counsel for inquiry

    GOP candidate for FBI says no special counsel for inquiry

    Comey, for instance, was a former United States attorney in Manhattan before being appointed deputy attorney general by George W. Reps. "We have no idea whether or not there are tapes but if there are tapes then they should be turned over", Collins said.
    Microsoft faulted over ransomware while shifting blame to NSA

    Microsoft faulted over ransomware while shifting blame to NSA

    Security patches would be available for clients with older machines, but only if they paid for custom support agreements. Even though Microsoft no longer provides updates for Windows XP, it is still widely used in Europe and Asia.
    Cueto, Grandal work out differences after benches cleared

    Cueto, Grandal work out differences after benches cleared

    He retired the first 10 Giants before giving up a soft single to Justin Ruggiano with one out in the fourth inning. Chicago went ahead to stay with five runs in the second against Scott Feldman (2-4), who was chased in the third.

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.