Oil prices rose on Thursday after OPEC sources said the group could extend its oil supply-reduction pact with non-members and might even apply deeper cuts if global crude inventories failed to drop to a targeted level.
OPEC and other exporters including Russia agreed last year to cut output by 1.8 million barrels per day (bpd) to reduce a price-sapping glut. The deal took effect on Jan. 1 and lasts six months.
Most producers appear to be sticking to the deal so far but it is unclear how much impact the supply reductions are having on world oil inventories that are close to record highs.
The supply pact could be extended by May if all major producers showed “effective cooperation”, an OPEC source told Reuters.
“There’s a good chance and high odds that the group (OPEC) decides that they want to continue this process,” Energy Aspects analyst Richard Mallinson said.
Benchmark Brent crude was up 30 cents at $56.05 a barrel by 1330 GMT. U.S. light crude gained 30 cents to $53.41 a barrel.
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