Investing.com - Oil prices pared losses on Monday, coming off the lowest levels of the session following reports that OPEC could extend its supply-cut deal with non-members beyond June if global crude inventories failed to drop to a targeted level.
Brent oil for May delivery on the ICE Futures Exchange in London dipped 6 cents, or around 0.1%, to $51.68 a barrel by 11:10AM ET (15:10GMT). The global benchmark fell by as much as 1.5% earlier to a session low of $51.01.
Elsewhere, the U.S. West Texas Intermediate crude May contract shed 24 cents, or about 0.5%, to $49.06 a barrel, bouncing back after hitting a daily trough of $48.46.
OPEC oil producers increasingly favor extending beyond June a pact on reducing crude supply to balance the market, sources within the group said, although Russia and other non-members need to remain part of the initiative.
"An extension is needed to balance the market," an OPEC delegate said. "Any extension of the cut agreement should be with non-OPEC."
OPEC and non-OPEC producers such as Russia agreed in November last year to reduce output by almost 1.8 million barrels per day to 32.5 million for the first six months of 2017, but so far the move has had little impact on inventory levels.
OPEC's latest monthly report showed global oil stocks in January rose to 278 million barrels above the five-year average.
Kuwait is scheduled to host a ministerial meeting on March 26 comprising both OPEC and non-OPEC members to review compliance with the output agreement and to discuss whether cuts would be extended beyond June.
A poll of market analysts showed on Friday that OPEC will have to extend its oil output curbs beyond June as a revival in crude production outside the group, specifically in the U.S., may scupper its efforts to erode an overhang of unused inventory.
Oil was down more than 1% earlier as rising U.S. shale production continued to feed concerns about a global supply glut.
Data from oilfield services provider Baker Hughes on Friday revealed that the number of active U.S. rigs drilling for oil rose by 14 last week, the ninth weekly increase in a row.
That brought the total count to 631, the most since September 2015, underlining concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.
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