Oil prices erased early losses to rise on Thursday afternoon after Algeria's Energy Minister Noureddine Boutarfa said that most OPEC producers are supporting the Saudi-Russian proposal for an extension of the production cuts until March 2018.
As of 2:17pm EDT on Thursday, WTI Crude was up 0.73 percent at US$49.43, while Brent Crude was trading up 0.82 percent at US$52.64, after earlier in the day the price of oil was down as investors' enthusiasm waned over yesterday's Energy Information Administration (EIA) draw.
Yesterday, oil prices were boosted by the EIA reporting a fresh draw in crude oil inventories for the week to May 12, at 1.8 million barrels.
This afternoon, whiplashed investors are once again sharing optimism as the time for the cut extension draws nearer.
According to Algeria's Boutarfa, most OPEC countries back the Saudi-Russian idea to roll over the cuts for another nine months in a bid to draw down persistently high oversupply and lift oil prices.
"Most of the countries support the proposition of Russia and Saudi Arabia to extend," Boutarfa said in Moscow after talks with Russian Energy Minister Alexander Novak, as quoted by Bloomberg.
Algeria is also backing the proposal and is optimistic that a deal could be reached, Boutarfa noted.
Although a small producer within OPEC, Algeria played an important role in bringing together the diverse group of the cartel's members to talk and finally reach the initial deal to collectively curb production. Related: From Oil To Arms: Saudis Move Away From Crude
Commenting on the upcoming meeting in Vienna, Jason Schenker, president of Prestige Economics LLC in Austin, Texas, told Bloomberg:
"Not many people will want to be bearish as the meeting approached. There's sure to be a decision that will be designed to boost prices."
Within OPEC, so far Saudi Arabia, Iraq, Iran, the United Arab Emirates (UAE), Kuwait, Venezuela, and Algeria have said they would support some kind of extension, or would support a rollover of the cuts if others do.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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