Oil market 'almost balanced' despite rising United States supply: IEA

Oil market 'almost balanced' despite rising United States supply: IEA

Saudi oil minister Khalid al-Falih said Monday the deal extension would have the same volume allocations that were included in the December agreement.

Global benchmark Brent crude settled up 98 cents, or 1.9 percent, at $51.82 a barrel, having touched $52.63, the highest since April 21. However, concern that the deal may not go far enough to tackle the glut of oil still dragging on the market caused prices to tumble back below $50 a barrel in recent weeks.

The world's biggest oil producers Russian Federation and Saudi Arabia on Monday called for extending an output reduction deal ahead of an OPEC meeting later this month. The two biggest producers participating in the curbs, OPEC's Saudi Arabia and non-member Russian Federation, both signaled willingness on May 8 to prolong the deal.

Saudi Arabia is the largest contributor among members of the Organization of Petroleum Exporting Countries to an agreement to balance an oversupplied market with managed production declines. Their announcement sparked a rally in oil prices, which had sagged on signs the cutbacks made so far haven't significantly depleted the world's brimming fuel inventories.

"Growth was weaker than expected in the first quarter, however, with notable downward revisions seen in the USA - where demand is essentially flat - and in Germany, Turkey and India", the report said.

This rise in the stock market for oil and other commodity products is expected to replace the shocking events that had occurred the other week which included the missile testing by North Korea and the cyber attack which damaged more than 2,00,000 computers in more than 150 countries.

Current Oil Minister Bijan Zanganeh, speaking on 6 May, said he believed producers were likely to extend the Opec-led deal although he did not give a timeframe, and added $55 was a suitable price for oil. OPEC ministers plan to meet on May 25 to decide whether to extend cuts in their production beyond June.

Oil touched a five-month low of $43.76 a barrel in NY on May 5 amid slower demand growth and rising supply outside OPEC, particularly in the U.S.

Goldman said that beyond the ongoing rise in USA oil production, which is up over 10% since mid-2016 to 9.3 million bpd, output will increase by OPEC members who were exempt from the cuts, or where supply disruptions had ended, including Libya and Nigeria.

Al Rumhy's counterparts from Iraq and Algeria said Thursday in Baghdad that OPEC and its allies support extending the cuts for another six months.