(Bloomberg) -- Oil fell as a pledge by OPEC-led producers to consider extending their output-cut deal failed to excite traders concerned that more time is needed to trim global stockpiles.
Futures dropped 0.5 percent in New York, extending their third weekly drop this month as rising U.S. supplies offset the effect of output curbs elsewhere. Five OPEC countries joined with non-member Oman to voice support for prolonging cuts past June, with Kuwait saying it should be for an additional six months. Russia said it needs more time before making a decision. Crude declines eased after failing to break though a multi-month low.
Oil last week slid to the lowest since November as U.S. stockpiles, output and drilling increased while the Organization of Petroleum Exporting Countries and other nations continued with efforts to ease a global glut. A committee of ministers from Kuwait, Algeria and Venezuela and their counterparts from Russia and Oman, meeting over the weekend, asked OPEC to review the market and make a recommendation in April about whether to roll over output curbs.
"The market is tired of their verbal interventions," John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by telephone. "The extension is clearly in trouble since they didn’t make a recommendation at this meeting."
West Texas Intermediate for May delivery dropped 24 cents to close at $47.73 a barrel on the New York Mercantile Exchange. Total volume traded was about 33 percent below the 100-day average. Prices slipped 1.7 percent last week.
Brent for May settlement slipped 5 cents to $50.75 a barrel on the London-based ICE Futures Europe exchange, and closed at a $3.02 premium to WTI. The global benchmark contract climbed 0.5 percent to $50.80 on Friday.
See also: Oil speculators can’t dump bets on rally fast enough amid glut
WTI dropped as low as $47.08 early Monday, approaching the $47.01 hit March 22, which was the lowest since Nov. 30, the day that OPEC agreed to its historic output-reduction deal.
"We tested recent lows and didn’t break through them," Gene McGillian, manager of market research for Tradition Energy in Stamford, Connecticut, said by telephone. "At this point it’s clear we haven’t had the cut long enough to have an impact on U.S. supplies. We continue to see rising inventories, and prices will remain under pressure until we see a significant decline."
Russia needs more time to assess the market, inventories and production in the U.S. and other non-OPEC countries, Energy Minister Alexander Novak said in an interview. The nation has cut its output by 185,000 barrels a day, compared with a target of 300,000, Novak said Saturday.
Saudi Arabia slashed taxes by more than a third for state oil producer Saudi Aramco ahead of what could be the world’s biggest initial public offering. Libya’s biggest oil terminal was loading its first tanker since fighting this month halted shipments. The Suezmax vessel Demetrios, which can carry as much as 1 million barrels, is loading at Es Sider, according to a person familiar with the matter. U.S. crude supplies rose 2 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report on Wednesday. Rigs targeting oil in the U.S. rose by 21 to 652 last week, the highest since September 2015, according to data Friday from Baker Hughes Inc.
Copyright 2017 Bloomberg News.
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