Brent crude oil LCOc1 dropped $1.22 to a low of $62.65 a barrel, before recovering to trade around $62.77, down $1.10, by 6.25 a.m. EDT. U.S. light crude oil CLc1, also known as West Texas Intermediate (WTI), fell to a low of $59.08, down 88 cents. Investors are increasingly concerned about surplus supply in the global oil market with the Organization of the Petroleum Exporting Countries pumping around 2 million barrels per day (bpd) more than needed, according to most industry estimates.
Crude oil prices bounced back on Tuesday from hitting roughly one-week lows to start the week as cautious optimism for an extended production-cut agreement percolated in the market.
The Organization of the Petroleum Exporting Countries and some non-OPEC producers agreed to cut production from Jan. 1 by 1.8 million barrels per day for six months to draw down crude from record stockpiles. OPEC sources have indicated the members increasingly favor an extension but want the backing of non-OPEC oil producers, which have yet to deliver fully on existing cuts. While speculation continues, global inventories remain stubbornly large.
April West Texas Intermediate crude CLJ7, +0.75% rose 32 cents, or 0.7%, to $48.54 a barrel in electronic trading on the New York Mercantile Exchange, ahead of the contract’s expiration at Tuesday’s settlement. May WTI CLK7, +0.88% added 43 cents, or 0.9%, to $49.34.
May Brent crude LCOK7, +0.89% rose 40 cents, or 0.8%, to $52.02 a barrel on the ICE Futures exchange in London.
Oil “is finding tailwind from agency reports that OPEC is seriously considering extending its production cuts to beyond June. In our opinion, the targeted inventory reduction will only materialize if OPEC output is maintained at its present level right into the fourth quarter,” said Carsten Fritsch and the commodities team at Commerzbank, in a note.
more at: http://www.marketwatch.com/story/crude-oil-gains-amid-cautious-optimism-for-opec-production-cut-extension-2017-03-21