U.S. West Texas Intermediate (WTI) crude futures were trading at USD49.44 per barrel at 0108 GMT, up 11 cents from their last settlement.
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“We do not expect any (OPEC) agreement on a specific production target to be achieved”, Commerzbank analysts said in a note.
The state-run Iraqi Media Network has stated that Iraq has reached a total output of 4.7 million barrels per day and exporting a reported 3.9 bpd, according to an Iraqi oil official. Talks in recent months between Opec and Russian Federation about freezing oil production had already encouraged a price rise.
In global oil markets, Brent prices have been supported by a series of supply disruptions in Nigeria, where militants have been staging a wave of attacks on oil pipelines, cutting the country’s output to the lowest in more than two decades. Prices are set for a fourth monthly increase, also the longest streak since 2011. However, analysts have cautioned that price volatility was likely to continue, saying it too early to believe this surge to be the beginning of the critical rebound.
The meeting will be rounded off with a press conference to be addressed by the president of OPEC Conference and the OPEC acting secretary-general, the statement added.
The International Energy Agency (IEA) and Goldman Sachs estimate that the global oversupply of crude oil will diminish in 2016.
“All the supply destructions and steep spending cuts are indicative of the improving fundamentals, as we expect global oil inventories to fall steadily in second-half of the year amidst record high demand”, said Gordon Kwan, the head of oil and gas research at Nomura.
“OPEC is indeed increasing supplies, practicing their market share first strategy”, said Victor Shum, managing director of downstream energy consulting at IHS, referring to a Saudi-led drive to boost OPEC’s production to take back market share.
A decrease in United States crude stocks and a drop in crude imports pushed the price higher towards the end of last week. In early 2015, oil prices similarly rallied from January to May before collapsing again.
Moreover, crude production in the USA and China have also fallen due to slashed budget for exploration.
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May 30 (Reuters) – Oil prices inched up toward $50 a barrel on Monday, although uncertainty ahead of an OPEC producer-group meeting later in the week was expected to cap gains. According to Citigroup, 50 oil may prompt the activation of many wells in the USA while prices at 60 are likely to spur fresh drilling. The reports come out one day later than usual due to the Memorial Day holiday in the US on Monday. Bank of America Merrill Lynch predicts that a strong dollar could pressure oil prices.
