Oil is moving back towards centre stage as producers held a preliminary meeting on Sunday ahead of the next round of OPEC and non-OPEC producer talks next month.
Futures finished lower Friday, with US West Texas Intermediate prices down for the first time in four sessions, but up for the week. Brent futures also ended higher for the week.
The price moves came ahead of a meeting on Sunday of the Joint Ministerial Monitoring Committee of members and nonmembers of the OPEC in Saudi Arabia. The committee monitors compliance with the OPEC-led production-cut agreement.
The weekend’s gathering was a warm-up for the wider meeting next month which will be a big test for oil producers’ appetite to extend the current production cut agreement into the second half of 2019.
Saudi Arabia’s Energy Minister Khalid al-Falih told Reuters on Saturday that OPEC will not decide on output until late June when the group is due to meet.
OPEC and allied producers will meet in Vienna on June 25-26, just ahead of the expiration of the OPEC-led production 1.2 million barrels a day cut deal.
Reuters pointed out that OPEC’s agreed share of the cuts is 800,000 barrels per day (bpd), but its actual reduction is far larger due to the production losses in Iran and Venezuela. Both are under U.S. sanctions and exempt from the voluntary reductions under the OPEC-led deal.
West Texas Intermediate crude for June delivery fell 11 cents, or 0.2%, to settle at $US62.76 a barrel. Prices climbed 1.8% for the week.
July Brent lost 41 cents, or 0.6%, to $US72.21 in Europe, with prices up 2.3% over the week.
Meanwhile, recent data suggests a possible slowdown in U.S. drilling activity. Baker Hughes on Friday reported another small fall in the number of active domestic rigs drilling for oil, down 3 to 802 this week.
The total active US rig count meanwhile fell by 1 to 987, that’s down 59 rigs from a year ago.
US oil stocks rose 2 million barrels to 470 million the week before last, the highest level since September 2017 while production fell to an estimated 12.1 million barrels a day from 12.3 million, according to the US Energy Information Administration.
