Oil is on course for the biggest weekly drop in a month.
The global Brent benchmark held steady on Friday at $53.08 a barrel, marking a 5.4 per cent drop for the week. US marker West Texas Intermediate was also flat at $50.73 a barrel, on course for a 4.9 per cent weekly dip.
Both markers fell the most since the week of March 10. After a mid-week sell-off triggered by a surprise build in US gasoline stocks, Opec ministers sought to calm nerves.
Saudi Arabia’s oil minister Khalid Al Falih said on Thursday momentum was building for an extension of the existing supply cuts deal in the clearest sign yet from Opec’s de facto leader the kingdom is pushing for a continuation of the pact.
“The latest attempt to talk up the market was ultimately in vain with the major oil contracts ending little changed in choppy trade,” said Stephen Brennock at London-based broker PVM.
“Early gains fizzled out with traders already banking on an extension to production cuts and having repositioned accordingly.”
Although some industry observers say a resurgent US shale industry may undermine a push by Opec and other producers such as Russia to reduce excess stockpiles and bring to a close the worst price crash in a generation, others say supply and demand should even out later this year.
Analysts at Citigroup said they still believed the US oil market was “turning a corner” and they expect global and US inventories to draw down throughout 2017, even with a US shale rebound.
Meanwhile Goldman Sachs said this week’s price slide was more to do with technical rather than fundamental factors. US crude inventories, the bank said, will draw down at an accelerated pace in the second quarter as the cuts take effect and demand strengthens.