Oil prices underwent choppy trade on Tuesday as black gold struggled to maintain a nearly week-long rally that have pushed prices up around 5% as markets looked ahead to data on U.S. crude stockpiles.
The U.S. West Texas Intermediate crude May contract was last at $53.09 by 9:22AM ET (13:22GMT), up 0.02%, or $0.01, after rising to $53.23 earlier in the session. The NYMEX barrel has pocketed gains of 5.4% since its last down day on April 3 when it closed at $50.24.
Elsewhere, Brent oil for June delivery on the ICE Futures Exchange in London slipped on 5 cents to $55.93 a barrel after hitting an intraday high at $56.16. The global benchmark has risen nearly 6% so far in April.
Bullish investors have been betting that the production cuts that major oil producers have already agreed to are not only effective, but could be extended beyond the current June cutoff.
Russia oil minister Alexander Novak said that his country’s oil output would be cut by 250,000 barrels-per-day (bpd) by mid-April and that Moscow will begin talking to Russian oil producers about the possibility of extending the production cut in agreement with OPEC, according to the TASS news agency.
Saudi Arabia also decreased production to 9.9 million bdp in March from the 10 million reported the prior month, according to Bloomberg, adding that the direct reporting numbers also revealed that Nigeria had reduced production to 1.27 million bpd from 1.43 million and Venezuela had cut to 2.235 million from 2.248 million. However, Qatar had increased production to 621,000 bpd in March from the prior 545,000, according to the news agency.
Meanwhile, Libya’s output was reported to drop to 490,000 bpd as production at its biggest oil field was halted.
OPEC agreed in November last year to curb its output by about 1.2 million barrels per day between January and June. Russia and 10 other non-OPEC producers have agreed to jointly cut by an additional 600,000 barrels per day.
In total, they agreed to reduce output by 1.8 million barrels per day to 32.5 million for the first six months of the year.
A joint committee of ministers from OPEC and non-OPEC oil producers will meet in late April to present its recommendation on the fate of the pact. A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.
In the meantime, investors were keeping an eye on U.S. drilling activity that has been steadily increasing even as other major oil producers reduce production in an attempt to reduce the global supply glut and push prices higher.
Late Friday, data from oil services provider Baker Hughes showed that the number of active rigs drilling for oil in the U.S. rose by 10 to 672. That was the 12th straight weekly increase to the highest number since August 2015.
Meanwhile, market players looked ahead to the American Petroleum Institute’s weekly report on crude inventories at 4:30PM ET (20:30GMT) Tuesday.
Official government figures will be released on Wednesday amid expectations for a build of 0.316 million barrels.