London: Oil rebounded from the week's lows to stabilise above $50 a barrel yesterday as market watchers focused on a weekend meeting of Opec and non- Opec producers that may result in an agreement to cut crude output further.
Brent and US oil prices gained support earlier from a slightly weaker dollar, but the US currency turned positive as the euro fell on the European Central Bank's decision to extend but reduce its bond-buying programme. Oil producers meet in Vienna on Saturday to see whether those outside the Organization of the Petroleum Exporting Countries (Opec) will cut production to help erase a global supply glutthat has depressed prices for more than two years.
Opec has agreed to slash production by 1.2 million barrels per day in the first half of 2017, a deal that bolstered crude futures despite doubts over whether the amount was enough and whether the cuts would be effectively implemented. Brent was up 50 cents at $53.50 a barrel by 1400 GMT. US light crude rose 50 cents to $50.27.
Both benchmarks have fallen more than $2 a barrel from highs reached on Monday when investors bought heavily in the wake of the Opec deal. Non- Opec Russia has signalled it was ready to cut production by 300,000 bpd and yesterday Azerbaijan said it would come to Vienna armed with proposals for its own reduction. Nevertheless, some analysts suggest the promised reduction in crude oil production may be insufficient to dent global oversupply and rebalance markets.
