Oil Prices Rebound on Friday on OPEC Extension Hopes

Oil prices rebounded on Friday after dropping to a one-month low the previous day, prompting investors to buy at cheaper levels ahead of a May OPEC meeting at which producers could extend output cuts.

Optimism is rising about the prospect of a year-long production curb deal, with most analysts polled by Reuters expecting the accord between the Organization of the Petroleum Exporting Countries and non-OPEC producers, struck at the end of last year, to be extended to the end of the year.



“OPEC … effectively said the production cut will be extended, meeting the reality of the restart of a big Libyan oilfield and the continued expansion of U.S. shale oil,” said Greg McKenna, chief market strategist at brokerage AxiTrader.

Friday’s oil price gains were also helped by a weaker dollar and signs that non-OPEC member Russia was fully compliant with output limits agreed among major producers late last year.



Benchmark Brent crude LCOc1 futures were trading up 44 cents at $51.88 a barrel by 1150 GMT. U.S. light crude CLc1 fetched $49.55 a barrel, up 58 cents.

Despite Friday’s gains, both contracts were set for their second straight weekly and monthly losses after Thursday’s price drop driven by news of the oilfield restarts in Libya.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza