Oil ended Friday little changed as Russia’s energy minister said it’s 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, Energy Minister Khalid Al-Falih said Thursday on Bloomberg Television. Russian Energy Minister Alexander Novak said that OPEC and its partners should decide in late April or mid-May whether to continue curbs. OPEC members exceeded their pledged cuts in February, two delegates said. Crude posted the first weekly gain since February.
Oil traded below $50 a barrel all week, near the lowest levels since November, as near-record U.S. crude stockpiles and increasing production weighed on the output reductions by the Organization of Petroleum Exporting Countries and non-OPEC nations. The groups had a combined compliance rate of 94 percent in February, 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 for April delivery rose 3 cents to settle at $48.78 a barrel on the New York Mercantile Exchange, up 29 cents for the week. Total volume traded was about 33 percent below the 100-day average.
Brent for May settlement advanced by 2 cents to end the session at $51.76 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.45 to May WTI.
Al-Falih said Thursday 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. Saudi ˜Mission Impossible’ Makes Longer OPEC Cuts Inevitable
Russia trimmed its oil production by 160,000 barrels a day through mid-March, Novak told reporters in Moscow. The cuts will reach the planned level of 300,000 barrels a day in April and will remain there through the end of June.
The U.S. oil rig count rose by 14 to 631 rigs, the highest level since September 2015, according to data published Friday by Baker Hughes Inc. Nationwide crude inventories slid by 237,000 barrels last week to 528.2 million, according to the Energy Information Administration. Yet stockpiles remain near the highest level in more than three decades. The previous record of 528.4 million was set the prior week.
It’s likely U.S. 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.