MTECHTIPS:-Oil pares losses after report of OPEC output dealextension

MTECHTIPS:-Oil pares losses after report of OPEC output deal extension

MTECHTIPS-Oil prices pared losses on Monday, coming off the lowest levels of the session following reports that OPEC could extend its supply-cut deal with non-members beyond June if global crude inventories failed to drop to a targeted level. Brent oil for May delivery on the ICE Futures Exchange in London dipped 6 cents, or around 0.1%, to $51.68 a barrel by 11:10 AM ET (15:10 GMT). The global benchmark fell by as much as 1.5% earlier to a session low of $51.01. Elsewhere, the U.S. West Texas Intermediate crude May contract shed 24 cents, or about 0.5%, to $49.06 a barrel, bouncing back after hitting a daily trough of $48.46. OPEC oil producers increasingly favor extending beyond June a pact on reducing crude supply to balance the market, sources within the group said, although Russia and other non-members need to remain part of the initiative. “An extension is needed to balance the market,” an OPEC delegate said. “Any extension of the cut agreement should be with non-OPEC.” OPEC and non-OPEC producers such as Russia agreed in November last year to reduce output by almost 1.8 million barrels per day to 32.5 million for the first six months of 2017, but so far the move has had little impact on inventory levels. OPEC’s latest monthly report showed global oil stocks in January rose to 278 million barrels above the five-year average. Kuwait is scheduled to host a ministerial meeting on March 26 comprising both OPEC and non-OPEC members to review compliance with the output agreement and to discuss whether cuts would be extended beyond June.