Oil bounces on OPEC talk but not much

OPEC is due to meet on May 25 in Vienna to decide whether to extend supply cuts through the second half.

Russian Federation thinks it will be necessary to extend its agreement to cut oil output in conjunction with OPEC beyond June, Energy Minister Alexander Novak said in an emailed statement Thursday.

Novak added that for the full recovery of the market, it is necessary to extend the initiative.

Oil prices down by about 15% since the start of the year, despite Opec’s agreement in November which cut output by 1.8 million barrels a day. The report suggests the economy’s slump in the first three months of the year could prove temporary.

Nigeria, which now pumps about two million barrels of oil per day, is seeking to be exempt from the new OPEC deal, which would be considered at the next ordinary meeting in Vienna.

SINGAPORE, May 5 Oil prices fell by as much as a further 3 percent on Friday, after prices had crashed to five-month lows in the previous session, as concerns about global oversupply wiped out all of the price gains since OPEC’s move to cut output.

Oil prices have slipped dramatically, driven by speculation the world’s supply glut will take longer to eradicate than markets had forecast. Australia’s S&P/ASX 200 fell 0.7 percent to 5,836.60. Markets in Japan and South Korea were closed for holidays.

Oil prices sharply extended losses just before Tuesday’s settlement, with USA crude breaking below $48 a barrel for the first time in more than a month.

West Texas Intermediate (WTI) slid below $45 a barrel for 1st time since OPEC agreed to cut output in November as USA shale confounds producer group’s attempts to prop up prices. American benchmark West Texas Intermediate declined to $45.31 a barrel, after beginning the day at $47.64 per barrel.

There is some support around the $45 level, Kilduff said.

United States crude oil production is estimated to reach a 48 year high by 2018, USA oil rigs rose to a two year high, U.S. inventories reaching near-record high, upcoming IPO of Saudi Aramco, increase in Libya’s crude oil production, reports of Iran and Iraq increasing crude oil production to increase market share. “Investors have focused on earnings, the increasing likelihood of a Macron win in the French presidential election and a dialling down in geopolitical risk rather than the obviously negative effects the sell-off in crude is having on the energy sector”, said David Morrison, senior market strategist at SpreadCo. After having started his trading career with NatWest Bank, he is now based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. The euro edged up to $1.09876 from $1.0984.