Hong Kong - Oil is losing momentum after the longest weekly
rally in two months, with confidence that
Futures were little changed in
Citigroup Inc. says output cuts by the Organization of Petroleum Exporting Countries will be able to offset the response from American producers to higher prices. Goldman Sachs Group Inc. has called for the market to be patient.
Stockpiles will start to decline significantly as supply cuts from the Organization of Petroleum Exporting Countries continue, Citi said in a report. Oil had rallied above $53 a barrel after some producers voiced support for prolonging a six-month production curb by OPEC and its allies past June.
“The market has had a good run higher amid Middle East
tensions and increased confidence that OPEC will extend its production
agreement beyond six months,” said Ric Spooner, a chief market analyst at CMC
“While US inventories are going to decline, they are falling from a much higher level than they have over the past two years. We’re also back into a price area that may attract more shale oil production.”
West Texas Intermediate for May delivery was at $52.62 a
barrel on the New York Mercantile Exchange, down 3 cents, at 7:50 a.m. in
Brent for June settlement was 2 cents lower at $55.34 a barrel on the London-based ICE Futures Europe exchange. Prices dropped 53 cents, or 1 percent, to $55.36 on Monday. The global benchmark traded at a premium of $2.27 to WTI.
Oil producers are showing “very good” compliance with
pledged production cuts,
Crude output at major