Oil price have stabilized Thursday after a steep drop in the prior session, with promises of further cuts from the world's exporters countering fears of growing production coming from the U.S.
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U.S. crude for May delivery recently traded up 2 cents, or 0.04%, to $50.46 a barrel on the New York Mercantile Exchange. The May contract expires at settlement, and the more actively traded June contract recently gained 10 cents, or 0.2%, to $50.95 a barrel. Brent, the global benchmark, gained 26 cents, or 0.5%, to $53.19 a barrel on ICE Futures Europe.
Oil prices fell by almost 4% Wednesday, the steepest drop since March 8. The decline was triggered by the surprise build in U.S. gasoline stockpiles that point to weaker-than-expected demand at a time when consumption of gasoline usually rises.
At an energy conference in Abu Dhabi, Saudi Arabia's energy minister Khalid al-Falih hinted at the extensive behind-the-scenes negotiations among big oil producers ahead of the group's meetings scheduled for May. He said a preliminary agreement to extend the cuts had been reached, but it still needed final signoff from some OPEC members.
"Saudi's done a good job of managing the rhetoric," said Michael Hiley, a trader at LPS Futures LLC. "Every time this market looks like it's in dire trouble, the Saudis and OPEC do a pretty good job of getting supportive comments out."
Slight production reported Wednesday also reinforced widespread anxiety that U.S. shale producers are becoming more capable in churning out oil at a lower price, analysts say. That is still holding prices in check Thursday, said Mark Waggoner, president of brokerage Excel Futures.
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"There's higher rig counts, supply seems to be building a little bit," he said. "We're probably going to go down in the short-term."
Latest data from the Energy Information Administration showed U.S. output rose to 9.25 million barrels a day last week, the highest level since August 2015.
Gasoline futures recently gained 0.6% to $1.6684 a gallon and diesel futures gained 0.2% to $1.584 8 a gallon.
and Jenny W. Hsu contributed to this article.
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(END) Dow Jones Newswires
April 20, 2017 13:06 ET (17:06 GMT)