Oil prices were largely up on Thursday, as traders waited to see whether oil- producing countries set to meet in Vienna would extend production limits to reduce the global crude glut.
Before midday Thursday, brent crude was trading at 56.29 dollars a barrel. U.S. crude was 50.64 dollars.
Ministers from the Organization of the Petroleum Exporting Countries, Russia and other producers would meet in Vienna on Friday to consider extending an agreement to reduce output by about 1.8 million barrels per day (bpd).
Many analysts expected them to extend the deal that currently lasted till March, but many also said prices at current levels could encourage some countries to boost production.
Oil prices surged more than 15 per cent over the last three months as global oil supply tightened.
That gain would make this the strongest third quarter for the market since 2004.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers are set to meet in Vienna at 0800 GMT on Friday to discuss a possible extension of an oil supply cut deal to prop up prices. Sachs said that talks over extending cuts are “noteworthy but premature”, adding “we believe it is unlikely that committee will recommend extension of cuts this week.” McCarthy, chief market strategist at CMC Markets in Sydney, predicted there will be “strong rhetoric but whether or not they will be able to boost oil prices from current high levels is another question”.
There will be some focus on whether Nigeria and Libya, who have been exempt from the curbs, will join any future cuts. The two OPEC members have both been invited to the meeting.
“The market is still split as to whether the meeting will bring fresh supply cuts to the table,” ANZ bank said in a note.
“With U.S. stockpiles remaining elevated, a firm signal about lower supply is likely needed for price momentum to remain positive.”
OPEC and some non-OPEC producers including Russia first agreed in November last year to cut their output by around 1.8 million barrels per day (bpd) to clear global oversupply and support prices.
Despite their concerted efforts – the oil cartel extended their supply cuts until the end of March – prices have remained depressed amid increasing U.S. oil production.
