U.S. West Texas Intermediate (WTI) crude futures, were up 7 cents at $53.43 per barrel.
Oil prices edged up on Friday, lifted by a report that producer club OPEC could extend an output cut aimed at reining in a global fuel supply overhang. Brent crude futures, the international benchmark for oil prices, were trading at $55.73 per barrel at 0125 GMT, up 8 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures, were up 7 cents at $53.43 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia have agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017, and estimates suggest compliance by OPEC is around 90 percent.
The production cuts are aimed at curbing global oversupply that has dogged markets since 2014. Yet despite action so far, inventories remain bloated and supplies high, especially in the United States. To help rebalance the market, OPEC sources told Reuters that the supply reduction pact could be extended or deepened if all major producers showed “effective cooperation”.
Traders said that until more clarity on a potential extension of production cuts was achieved, oil prices would be capped. “Despite the headlines, the massive inventory glut in both oil and gasoline continues to thwart any upward momentum,” said Stephen Innes, senior trader at OANDA in Singapore.
U.S. crude oil and gasoline inventories soared to record highs last week as refineries cut output and gasoline demand softened, the Energy Information Administration said on Wednesday. Crude inventories rose by 9.5 million barrels in the week ended Feb. 10, nearly triple analysts’ expectations, boosting commercial stocks to an all-time record at 518 million barrels. Gasoline stocks rose 2.8 million barrels, compared with analysts’ expectations in a Reuters poll for a 752,000-barrel drop. That pushed inventories of the fuel to a record 259 million barrels. The bloated stocks come as U.S. crude oil production <C-OUT-T-EIA> has risen 6.5 percent since mid-2016 to 8.98 million bpd.