Oil on Friday ended little changed as the Russian minister of energy said it is too early to discuss extending an output-reduction deal, reducing optimism a day after Saudi Arabia indicated that a rollover to the second half of the year is a near certainty.
Saudi Arabia is ready to extend the cuts if supplies stay above the five-year average, Saudi Arabian Minister of Energy, Industry and Mineral Resources Khalid al-Falih said on Thursday on Bloomberg Television.
Russian Minister of Energy Alexander Novak said that OPEC and its partners should decide late next month or the middle of May whether to continue curbs.
OPEC members exceeded their pledged cuts last month, two delegates said.
Oil traded below US$50 per barrel all week, near the lowest levels since November last year, as near-record US crude stockpiles and increasing production weighed on the output reductions by OPEC and non-member countries.
The countries last month had a combined compliance rate of 94 percent, compared with 86 percent in January, delegates said.
“There’s a bit more producer commitment, with the idea of more producers being amicable to the fact that they may need to extend this period of output restraint beyond the initially agreed six-month period,” Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London, said by telephone. “But today, we have a little bit of cold water being poured on this constructive sentiment by Russia.”
West Texas Intermediate (WTI) for April delivery on Friday rose US$0.03 to settle at US$48.78 per barrel on the New York Mercantile Exchange, up US$0.29 for the week. Total volume traded was about 33 percent below the 100-day average.
Brent for May settlement on Friday advanced by US$0.02 to end the session at US$51.76 per barrel on the London-based ICE Futures Europe exchange, up US$0.39 for the week. The global benchmark crude traded at a premium of US$2.45 to May WTI.
Al-Falih on Thursday said that he wants to signal to the market “that we’re going to do what it takes to bring the industry back to a healthy situation.”
The OPEC-led cuts are moving global markets in the “right direction” and fundamentals have improved considerably, he said.
Russia trimmed its oil production by 160,000 barrels per day through the middle of this month, Novak told reporters in Moscow.
The cuts are to reach the planned level of 300,000 barrels per day next month and will remain there through the end of June.
The US oil rig count rose by 14 to 631 rigs, the highest level since September 2015, according to data published on Friday by Baker Hughes Inc.
US crude inventories last week slid by 237,000 barrels to 528.2 million, according to the Energy Information Administration.
Still US stockpiles remain near the highest level in more than three decades.
It is likely US crude inventories will increase during the rest of seasonal refinery maintenance season, Bob Yawger, director of the futures division at Mizuho Securities USA Inc in New York, said by telephone.
Oil market news:
‧ Angola is to cut its crude exports in May to 1.67 million barrels per day, according to a preliminary loading program obtained by Bloomberg.
‧ BP PLC is in talks with Ineos AG to sell the Forties pipeline, one of the most important pieces of oil infrastructure in the UK’s North Sea.