OPEC and its partners will meet on May 25 in Vienna to decide whether to prolong their supply cuts past June. Several OPEC members have voiced support for the proposal to extend curbs after Russia and Saudi Arabia said global inventories haven’t yet fallen to targeted levels. Yet, production in the U.S. has been increasing, threatening to derail the group’s goal. West Texas Intermediate for June delivery gained as much as 72 cents to $50.07 a barrel and traded at $49.94 on the New York Mercantile Exchange at 10:42 a.m. in London. Prices are up 4.4 percent this week, the most since the period through March 31. Total volume traded was 41 percent above the 100-day average. Brent for July settlement increased as much as 79 cents, or 1.5 percent, to $53.30 a barrel on the London-based ICE Futures Europe exchange. click Read More below for more of the story
Saudi Arabia proposed that OPEC and key allies such as Russia cut crude oil production by one million barrels per day. Crude oil prices fell on fears that such a smaller-than-expected reduction would not be enough to reduce global oversupply and prop up futures.
The OPEC meeting has not settled on a crude oil production cut figure, Saudi Minister Khalid Al-Falih told reporters. But as OPEC’s de facto leader, Saudi Arabia’s proposal gives a strong indication of what the final decision will be.
On Wednesday, Russia agreed to take part in a six-month reduction after Saudi Arabia said it wouldn’t stand alone with output cuts.
But OPEC and non-members couldn’t agree on the size of the cut.
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