Iraq, Algeria to support extension of oil production cuts

Oil prices rise on expectation of output cut extension

Higher crude output from the USA should pressure global oil prices through the end of 2018, the US government said May 9, ahead of a meeting later this month at which OPEC and non-member producers will discuss extending supply cuts.

Saudi Arabia's oil minister said he is confident that an agreement by oil producers to curb output and shrink a market glut will be extended into the second half of the year and possibly beyond.

West Texas Intermediate, the US benchmark for the price of oil, was down 0.28 percent to $46.30 per barrel.

"While OPEC is trying to cut production, Libyan output is at its highest level since October 2014 and US shale oil has added 800,000 barrels to the market", he said.

Oil prices had recently collapsed to their lowest since late November as investor anxious about the world's stubbornly persistent glut of crude erased most of the gains that followed last year's OPEC's output cut.

The Organization of the Petroleum Exporting Countries (OPEC) members chose to reduce output by 1.8 million barrels per day to rebalance the oil market for the first six months of this year.

The American Petroleum Institute (API) reported a drawdown of 5.789 million barrels of crude oil, for the week ending May 5, which beat analyst expectations of a fall of 1.8 million barrels. Aramco had previously maintained supplies to important Asian customers.

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Brent for July settlement was 12 cents higher at $49.46 a barrel on the London-based ICE Futures Europe exchange.

Russian Federation said yesterday it was discussing prolonging cuts with other producers beyond 2017, without giving a clear timeline.

OPEC countries including core Gulf members are discussing internally whether an extension of nine months or longer is needed to give the market more time to rebalance, the sources said.

"Chief among (the) oil market's worries is that the renewed rise in U.S. oil production is reducing the speed at which the supply surplus is being eroded", said Fawad Razaqzada, market analyst at Forex.com told Reuters.

The figures showed the biggest one-week drop in oil stockpiles this year.

Two OPEC members are exempt from the cut-Nigeria and Libya- and a third member, Iran, was allowed to boost output to a specified level.

Paris, May 11 OPEC said today that oil producers needed to make more joint efforts to match supply and demand in the oil market in the face of rising output in the United States.

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