Oil prices witness notable increase before OPEC

Oil prices were at rise on Friday, as traders waited to see whether major oil- producing countries planned to meet in Vienna would extend production cuts to reduce the global crude glut. International benchmark Brent crude futures were at $56.51 a barrel at 0644 GMT, up 0.14 percent from their last close. While US West Texas Intermediate (WTI) crude futures were up 0.24 percent, at $50.67 per barrel.
Ministers from the Organisation of the Petroleum Exporting Countries, Russia and other producers are set to meet on Friday to consider extending an agreement to reduce output by about 1.8 million barrels per day (bpd). Goldman Sachs said that talks over extending cuts are “noteworthy but premature.”
“We believe it is unlikely that committee will recommend extension of cuts this week,” Sachs added. Michael McCarthy, chief market strategist at CMC Markets in Sydney, predicted there will be “strong rhetoric but whether or not they will be able to boost oil prices from current high levels is another question”.
“The market is still split as to whether the meeting will bring fresh supply cuts to the table,” ANZ bank said in a note. “With US stockpiles remaining elevated, a firm signal about lower supply is likely needed for price momentum to remain positive.”
OPEC and some non-OPEC producers including Russia first agreed in November last year to cut their output by around 1.8 million barrels per day (bpd) to clear global oversupply and support prices, Reuters reported. The oil cartel extended their supply cuts until the end of March.
The Energy Information Administration (EIA) reported on Wednesday that US crude production reached 9.51 million bpd in the week ended Sept.15, up from 8.78 million bpd a week ago. Oil prices surged more than 15 per cent over the last three months as global oil supply tightened.