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.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.