il rebounded from the week’s lows and hovered above $50 a barrel on Thursday as market watchers focused on an upcoming weekend meeting between OPEC and non-OPEC producers that may result in an agreement to cut crude output further.
Brent and U.S. oil prices gained support early from a slightly weaker dollar, but the U.S. currency turned positive as the euro fell on the European Central Bank’s decision to extend but reduce its bond-buying program.
Oil producers will meet in Vienna on Saturday to see whether those outside the Organization of the Petroleum Exporting Countries will cut production to help ease a global supply glut that has pressured prices for more than two years.
In the late morning, Brent flipped into negative territory while U.S. prices pared gains briefly after reports that Russia sees a risk that the meeting could be moved due to questions that have come up. A Russian energy ministry spokeswoman, however, said the meeting would continue as planned.
OPEC has agreed to slash production by 1.2 million barrels per day (bpd) in the first half of 2017, a deal that bolstered crude futures despite doubts over whether the amount was enough and whether the cuts would be effectively implemented.
Brent was up 35 cents, or 0.66 percent, to $53.35 a barrel by 11:36 a.m. EDT (1636 GMT). U.S. light, sweet crude was up 40 cents, or 0.8 percent, at $50.17 a barrel.
Both benchmarks have fallen more than $2 a barrel from highs reached Monday when investors bought heavily in the wake of the OPEC deal.
Given the rally to $50 a barrel, non-OPEC members may not be persuaded to cut output, said Tim Evans, energy futures specialist at Citigroup.
“Further effective cooperation between oil producers seems unlikely in our view, as OPEC and Russia have already agreed on policy, reducing the leverage they have with other countries in our view,” he said in a note.
Non-OPEC Russia has signaled it was ready to cut production by 300,000 bpd and on Thursday Azerbaijan said it would come to Vienna armed with proposals for its own reduction.
Source: Reuters (By Catherine Ngai; Additional reporting by Sabina Zawadski and Christopher Johnson in London, Jane Chung in Seoul and Keith Wallis in Singapore; Editing by David Gregorio)