Oil rises in price on expectations of a possible extension of OPEC cuts oil production
The oil is restrained more expensive in the course of trading on Tuesday, boosted by expectations that OPEC and non-OPEC will agree on the extension of the limits of oil production to support the market, and strong global demand will contribute to reducing inventory and excess supply of fuel, according to CNBC.
The price of may futures for Brent crude on London’s ICE Futures exchange at 7:10 kV on March 21, rose by 25 cents (0,48%) – to $to 51.87 per barrel.
The April contract for WTI crude oil in electronic trading on the new York Mercantile exchange (NYMEX) climbed 17 cents (0.35 per cent) to $48,39 per barrel.
On the eve of the growth in the number of drilling rigs operating in the U.S., WTI fell to the lowest in a week – $exchanged them for 48.22 per barrel (-1,2%), while Brent crude lost 0.3% to $51,62 per barrel.
The current agreement on the reduction of production volumes is valid until the end of June . However, it has not had the desired impact on the market, since not all participating countries fully comply with its obligations. In addition, other producers, primarily the US, have started to increase production, bringing oil prices dropped by more than 10% since the beginning of 2017.
Sources in OPEC are increasingly talking about the possibility of extending the agreement, but emphasize that it needs the consent of Russia and other countries outside the cartel, says Nasdaq.
Traders expect steady growth in oil demand will help restore balance in the market and support prices.
“World demand in 2017 will remain healthy, and the trend exceeds long-term average of 1.2 million barrels per day 0.2-0.4 million barrels per day. In this case, US shale oil will not prevent the rebalancing of the market through a combination of strong demand and a weakening global offers”, – says a senior analyst commodity markets at Vontobel Asset Management Jeremy Baker.
The following important factors that could affect the oil market in General, will be the weekly data about stocks in the United States: American petroleum Institute (API) in the environment and energy Ministry on Wednesday evening.