A deal by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members to reduce oil production “surprisingly” appears to be holding, Justin Urquhart Stewart, director at Seven Investment Management in London, told New Europe on April 18. He predicted that oil prices are going to stay “within this boundary at the moment – the boundary being late 40s up to late 50s. That’s the sort of area of volatility”.
“I can’t see the reason they should push significantly higher at the moment unless there is a shortfall in production somewhere but that doesn’t seem to be the case and maybe even weaknesses down to the late 40s. But I don’t see it going significantly below that because the countries have shown their abilities to actually control production albeit on a limited basis,” Urquhart Stewart said.
Arabiya TV quoted Saudi Energy Minister Khalid al-Falih as saying on April 17 that the level of compliance among OPEC and non-OPEC oil producers with a global deal to cut output is very good. However, he noted it was too early to discuss whether they planned to extend the six-month production deal that was implemented in January.
On April 18, oil prices dropped, hitting their lowest in 11 days, following the US Energy Information Administration said it estimates for a combined 124,000 barrels-per-day growth in US shale production over May, Reuters reported.
Global benchmark Brent crude futures fell 11 cents, trading at $55.25 a barrel by 11:13 a.m. EDT, according to the news agency. Brent touched $54.76 intraday, its lowest since April 7. US WTI crude futures rose 1 cent to $52.66 a barrel. Their intraday low was $52.14, also the weakest since April 7.