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Oil dips on uncertainty over producers' commitment to output cuts

Published 06/05/2020, 08:58 AM
Updated 06/05/2020, 09:00 AM
© Reuters.
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SEOUL, June 5 (Reuters) - Oil prices eased slightly on
Friday as markets wait to see whether major producers will
commit to an extension of record production cuts to support oil
prices.
Brent crude LCOc1 futures were down 5 cents, or 0.1%, at
$39.94 a barrel as of 0051 GMT and U.S. West Texas Intermediate
(WTI) crude CLc1 futures fell 14 cents, or 0.4%, to $37.27 a
barrel.
Still both benchmarks are set for a sixth weekly gain on the
back of output cuts and signs of improving fuel demand as
countries begin to ease restrictions to prevent the spread of
the coronavirus.
WTI is up nearly 5%, while Brent has risen about 13%
The Organization of the Petroleum Exporting Countries and
allies led by Russia, a group known as OPEC+, had been expected
to meet on June 4 to discuss extending output cuts, but the
meeting was delayed amid talks over poor compliance by some
producers.
It is unclear when they will meet, but three OPEC+ sources
said they could still hold a ministerial video conference on
June 6 or June 7, should Iraq and others agree to boost their
adherence to existing supply cuts. "The oil group is struggling to find consensus around
extending deep output cuts," ANZ Research said in a note.
"The growing fear is that not only will a deal to extend the
deep cuts not be reached, but producers may even relax their
current over-compliance. This would ultimately see output rise
in coming weeks."
Saudi Arabia and Russia, two of the world's biggest oil
producers, want to extend output cuts of 9.7 million barrels per
day (bpd) into July.
If OPEC+ fails to agree to roll over the current output
curbs, that would mean the curbs could scale back to a cut of
7.7 million bpd from July through December as earlier agreed.


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