Oil rebounds, as OPEC talks up cutting supply into 2018

Oil rebounds, as OPEC talks up cutting supply into 2018

Oil rebounds, as OPEC talks up cutting supply into 2018

Global benchmark Brent futures were up 19 cents, or 0.4 percent, at $48.92 a barrel at 0612 GMT.

After the cartel cut production, a 22 percent bounce to a high of US$57.10 in January was erased partly as USA crude output and shale production rose.

Oil is edging higher after last week dropping to its lowest levels since the Organization of Petroleum Exporting Countries agreed in November to reduce output.

The higher prices were a result of top exporter and de facto OPEC leader Saudi Arabia saying on Monday it would "do whatever it takes" to rebalance a market that has been dogged by oversupply for over two years, resulting in crude prices below $50 per barrel.

Oil prices have been under pressure of late, amid investor concerns the global supply glut is not receding as fast as expected.

The lengthy period of rebalancing has prompted a reassessment in the market of whether OPEC's cuts are working.

Khalid Al Falih, Saudi Arabia's energy minister, said last month in Abu Dhabi that the kingdom was on board for an extension of at least three months as long as all other parties to December's deal agree, a policy that is backed by its close Arabian Gulf allies, Kuwait, Qatar, and the UAE, as well as Iraq, which together bear nearly all the load of Opec's pledged cuts.

He said a deal on cutting output could extend early into next year.

Meanwhile, Iran says it will go along with the OPEC consensus when the cartel meets later this month to decide if the deal will be extended beyond June.

"The market is getting exhausted of hearing from OPEC how good they are, how compliant (with supply curbs) they are", said Eugen Weinberg, head of commodity research at Commerzbank.

But primarily the market has been looking at the United States, where oil output has surged back from a trough last autumn, rising by 840,000 bpd in October to 9.3 million bpd last month to cancel out at least half the pledged Opec/non-Opec cuts. For the week to May 2, investors cut bullish bets on Brent to the lowest level since late November, while hedge funds and money mangers also cut gross long positions in USA crude futures to the lowest since early November.

Some stock markets across Asia fell in tandem with oil prices yesterday as analysts forecast further weakness amid signs that global USA and China demand may not be strong enough to mop up the excess production. Off-topic, inappropriate or insulting comments will be removed.

Amazon expected to unveil new 'style assistant' today
Snap Inc. loses $2.2B in first quarter as public company