Oil prices rise on output cut expectation

LONDON: Oil prices rose on Wednesday, supported by growing confidence that Opec and other big producers would agree to keep output restricted for the rest of 2017 and into the first quarter of next year.

Benchmark Brent crude oil was up 40 cents a barrel at $54.55 by 0810 GMT. US light crude oil was 35 cents higher at $51.82.

Both crude benchmarks have gained more than 10 per cent from their May lows below $50 a barrel, rebounding on a consensus that the Organisation of the Petroleum Exporting Countries and other producers will maintain strict limits on oil production in an attempt to drain a global oversupply.

Opec has promised to cut supplies by 1.8 million barrels per day (bpd) until the end of June and is expected on Thursday to decide to prolong that cut to March 2018.

“With oil stocks nowhere near Opec’s self-assigned objective of the recent five-year average level, an extension of cuts seems all but a forgone conclusion,” said Harry Tchilinguirian, strategist at BNP Paribas. Sushant Gupta, research director at Wood Mackenzie, told Reuters Global Markets Forum that output cuts were likely to be extended until the first quarter of 2018. -