Oil rises as Opec-led producers mull extending output cut deal

A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma, on Sept 15, 2015.
A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma, on Sept 15, 2015. PHOTO: REUTERS

SYDNEY (BLOOMBERG) - Oil rose on Monday (March 27) after Opec and its allies voiced support to extend past June their deal to jointly cut output aimed at reducing global inventories.

Futures rose as much as 0.7 per cent in New York after gaining 0.6 per cent on Friday. OPec is assessing whether to extend the reductions for another six months, Kuwait Oil Minister Issam Almarzooq said on Sunday after a meeting in Kuwait. Meanwhile, Libya's biggest oil terminal was loading its first tanker since fighting earlier this month halted shipments.

Oil last week slid to the lowest since November as rising US.supply continued to counter production curbs by members of the Organization of Petroleum Exporting Countries and other nations. A committee of ministers from Kuwait, Algeria and Venezuela and their counterparts from Russia and Oman that met over the weekend asked OPEC to review the market and give them a recommendation in April on rolling over the cuts.

West Texas Intermediate for May delivery increased 28 cents to US$48.25 a barrel on the New York Mercantile Exchange at 9:35am Sydney time. Total volume traded was about 63 per cent below the 100-day average. Prices on Friday rose 27 cents to US$47.97, paring the weekly loss to 1.7 per cent.

Brent for May settlement rose 27 cents to US$51.07 a barrel on the London-based ICE Futures Europe exchange. The contract gained 24 cents, or 0.5 per cent, to US$50.80 on Friday. The global benchmark crude traded at a premium of US$2.83 to May WTI.