By Julia Simon
NEW YORK (Reuters) – Oil prices closed up on Friday on growing hope that OPEC might agree to extend production cuts long enough to reduce a global crude glut, but crude prices still posted a weekly decline.
U.S. light crude <CLc1> rose 36 cents to settle at $49.33 a barrel, off the day’s high of $49.76. Benchmark Brent crude <LCOc1> futures settled up 29 cents to $51.73 a barrel. Both benchmarks ended with weekly and monthly declines.
The more active Brent futures contract for delivery in July <LCON7> closed at $52.05 Friday, up 23 cents.
If the Organization of the Petroleum Exporting Countries (OPEC) agrees to extend the cuts, then bloated global inventories could drain by the end of the year, a Reuters poll of economists and analysts showed.
OPEC next meets in May to discuss oil supply policy and its secretary-general, Mohammad Barkindo, said this week the group wants to see global inventories reduced further.
That has made energy investors more hopeful the producer group will extend supply cuts into the second half of the year. OPEC’s deal to curb supply, which non-OPEC members such as Russia have joined, is due to expire at the end of June.
The talk of extending the cuts has come even before some producers have reduced output to the agreed-upon levels.
Non-OPEC member Russia said it would meet its deal target of cutting output by 300,000 barrels per day (bpd) by the end of April, supporting crude prices.
U.S. oil prices rose after OPEC made the deal in November. But they remain below where producers would like them, which would encourage OPEC to extend the deal, said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.
Still, weekly U.S. government data showed crude output, mostly from the shale oil industry, rising. Crude output for February rose 193,000 barrels per day to 9.03 million bpd, the highest since August 2015.
U.S. oil prices have lost ground in eight of the last 11 sessions.
Hedge funds showed pessimism on U.S. crude oil for the first time in four weeks in the week to April 25, the U.S. Commodity Futures Trading Commission (CFTC) said Friday.
The speculator group cut its combined futures and options position in New York and London by 70,136 contracts to 284,942 during the period, CFTC data showed.
(Additional reporting by Karolin Schaps in London, Henning Gloystein in Singapore; Editing by David Gregorio and Bill Trott)