Oil prices retreat on profit-taking

Share

Under the current agreement that started on January 1, the 13-country OPEC and other producers pledged to cut output by nearly 1.8 million barrels per day in the first half of the year.

Extending the curbs at already agreed-upon volumes is needed to reach the goal of reducing global inventories to the 5-year average, the energy ministers of the world's biggest oil producers said in a joint press conference.

Extending the agreement between OPEC and countries outside of the cartel for 9 months will help reaching a market balance and overcome the winter decline of demand for oil, he went on.

Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London rose 25 cents to $52.07 a barrel.

US energy firms added oil rigs for a 17th week in a row, extending a 12-month drilling recovery, energy services firm Baker Hughes Inc said on Friday.

It was expected that Opec and other producers such as Russian Federation would extend the agreement, reached late previous year, until the end of 2017. At that rate, according to a report at Bloomberg, by the end of this year, lower crude production will remove about 120 million barrels from global stockpiles. The following month, 11 non-OPEC oil-producing countries pledged to cut another 558,000 barrels a day, bringing the overall reduction to 1.8 million barrels a day.

More news: Emmanuel Macron angers French right by appointing 11 women in 'balanced' cabinet
More news: Trump talks of engagement to resolve North Korea crisis
More news: Video Shows Turkish President Erdogan Watching Brutal Fight Outside Embassy In Washington

"Based on the consultations I have had with participating members I am rather confident the agreement will be extended into the second half of the year and possibly beyond", Saudi Oil minister Khalid al-Falih said at the Asia Oil and Gas Conference in Kuala Lumpur.

Benchmark futures prices for US crude rose 3.2% on the news to trade at $49.41 a barrel by 0800 Eastern Time, while shares in big shale oil and gas companies such as and Whiting Petroleum were also higher.

Russian Federation and Saudi Arabia heavily depend on oil revenues.

Goldman said that beyond the ongoing rise in United States oil production, which is up over 10 per cent since mid-2016 to 9.3 million bpd, output will increase by Opec members who were exempt from the cuts, or where supply disruptions had ended, including Libya and Nigeria.

Major oil producers are preparing to extend output cuts until March 2018 in a bid to reduce a global supply glut.

Goldman retained its average Brent price forecast for the third quarter of 2017 at US$57 per barrel.

Share