Oil prices rise on expectation of output cut extension
Oil prices rose on Monday on a growing conviction that an OPEC-led production cut initially scheduled to end in June would be extended to cover all of 2017, although a relentless increase in U.S. drilling activity is seen capping gains.
The rise came after steep falls last week on the back of ongoing high supplies from countries that aren’t participating in the cuts, including the United States where output is soaring C-OUT-T-EIA.
Traders said the victory of Emmanuel Macron in the French presidential elections against far-right Marine Le Pen also supported oil prices as it raised hopes of a more stable European economy.
“The market viewed the fall as overdone,” ANZ bank said on Monday.
Brent crude futures, the international benchmark for oil prices, were at $49.85 per barrel at 0020 GMT on Monday, up 75 cents, or 1.5 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude oil futures were trading at $46.87 per barrel, up 65 cents, or 1.4 percent from the last close.
Reporting by Henning Gloystein; Editing by Richard Pullin for Reuters.com