OPEC leans toward extension of oil output level freeze deal

Crude inventories in the USA fell 5.2 million barrels in the week through May 5, the Energy Information Administration reported.

Bake told the S&P Global Platts Crude Oil Summit on Thursday that while oil inventories were shifting, with cargoes moving from the Atlantic Basin into Asia, the overall drawdown that many hoped for amid OPEC-led production cuts had not yet materialised.

International Brent crude futures were at $50.46 per barrel at 0438 GMT on Thursday, up 24 cents, or 0.5 per cent, from their last close.

"We saw the biggest draw in (U.S.) inventories for the year last week with stockpiles down more than 5 million barrels, and it looks like OPEC's production cut is finally biting", said Greg McKenna, chief market strategist at brokerage AxiTrader.

Jabber al-Luaibi and Noureddine Boutarfa said the official announcement of the extension will take place at OPEC's May 25 meeting at its headquarters in Vienna, with the Algerian minister adding that "Algeria and Iraq maintain a united stand for the next cuts".

State-owned Saudi Aramco will reportedly reduce oil supplies to Asian customers by about seven million barrels in June, as part of the Organization of the Petroleum Exporting Countries' agreement to reduce production.




OPEC's efforts to tighten the market and prop up prices have been undermined by a relentless rise in US production, especially from shale oil drillers.

Currently, OPEC is planning to extend the tenure of this oil curb to the year-end or to next year.

Crude inventories fell 5.2 million barrels in the week to May 5, the U.S. Energy Information Administration said.

Nigeria, which along with Libya is exempt from OPEC cuts, is also expected to see a jump in output soon as Shell tests the Trans Forcados oil export pipeline before it restarts.

On average, however, Brent and WTI spot prices in April were $0.72 per barrel and $1.73 per barrel higher, respectively, than the March averages, said the report.

Brent and US light crude closed at their second lowest levels since November 29, 2016 the day before OPEC announced it would cut output in the first half of 2017.

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