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Oil prices climb on hopes output cuts will be extended

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Reuters TOKYO
Last Updated : May 19 2017 | 6:31 AM IST

TOKYO (Reuters) - Oil futures rose in early trading on Friday on growing optimism that big producing countries will extend output cuts to curb a persistent glut in crude, with key benchmarks heading for a second week of gains.

Brent crude was up 12 cents at $52.63 at 0006 GMT, after settling up half a percent on Thursday. The contract is on track for a 3.5-percent climb this week, a second week of gains.

U.S. crude oil was up 14 cents at $49.49 a barrel, after finishing the previous session at $49.35 a barrel, the highest close since April 26. The contract is heading for a weekly increase of 3.4 percent.

Oil prices have been trapped in a tight range in recent weeks as rising U.S. production has erased the effects of output cuts by the Organization of Petroleum Exporting Countries (OPEC) and other countries, including Russia.

But market watchers are growing more confident that OPEC, Russia and other big producers will extend cuts of almost 1.8 million barrels per day (bpd) until the end of March 2018. U.S. producers are not party to any agreements capping production.

On May 25, leaders from OPEC and other producing countries will meet in Vienna to decide on output policy.

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Rosneft, the largest oil producer in Russia will meet agreements with the grouping on oil output reductions, the company's chief executive told reporters in Berlin on Thursday.

(Reporting by Aaron Sheldrick; Editing by Joseph Radford)

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First Published: May 19 2017 | 5:56 AM IST

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