Oil prices edge up in anticipation of extended crude output cut

Brent crude jumped back above US$50 on the news and stayed there, buoyed by the ministers' comments, while WTI, which last Friday slipped below US$45 a barrel, regained some ground, settling yesterday at US$47.91 a barrel.

West Texas Intermediate (WTI) crude oil prices are forecast to average $2 per barrel less than Brent prices in both 2017 and 2018, according to the report.

The Organization of the Petroleum Exporting Countries, Russia and other producers agreed previous year to curb production by 1.8 million barrels per day for six months from January 1.

Its price remained under pressure last week after key support near $48 failed to hold.

U.S. crude production is expected to rise by more than previously expected in 2017 to 9.31 million barrels per day from 8.87 million bpd in 2016, a 440,000 bpd increase, the U.S. Energy Information Administration (EIA) said.

US oil production has risen more than 10 percent since mid-2016 to 9.3 million bpd, the highest since August 2015 and close to the levels of top producers Russian Federation and Saudi Arabia.

Oil cartel OPEC are due to meet later this month, which could see an agreement to sustain oil cuts to help raise falling prices.

Trump to meet Russian Foreign Minister Lavrov
Nevertheless, Lavrov struck a conciliatory tone and said Russian Federation isn't intending to retaliate. Lavrov said Trump was seeking "mutually beneficial" and "pragmatic" relations with Russian Federation .

"OPEC and non-OPEC members have shown commitment to production cuts and an extension of the agreement. will assist in drawing stocks over Q3 and stabilising the market", BMI Research said in a note.

Seven million barrels is roughly two days of oil imports into Japan, the world's fourth-biggest importer.

Brent for July settlement was 5 cents lower at $49.29 a barrel on the London-based ICE Futures Europe exchange.

A pick up in U.S. oil production has contributed to the imbalance in the market but there were signs last week that American crude inventories had fallen. Goldman Sachs' head of commodities Jeff Currie said this week the market is already in a supply deficit.

Lower crude oil prices, meanwhile, mean lower gasoline prices and US consumers could put some demand pressure back in the market in the way of travel plans for the upcoming Memorial Day holiday.

OPEC said Thursday 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.

"Conservative estimates predict that we will need to offset 20 million barrels per day in combined demand growth and natural decline over the next five years", Falih said.

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