Oil rose on Tuesday as expectations of an extension to OPEC-led supply cuts supported prices, reversing losses earlier in the session after a White House proposal suggested selling off half the country's huge oil stockpile.
"The Saudi oil minister's view seems accurate and no serious objection is expected if at all", said one delegate, who asked not to be identified as he is not allowed to speak to the media.
Even if Congress passes the proposed White House budget, the majority of sales from the usa reserve would take place years from now.
Russian Federation kept its lead even as shipments were down 1.9 per cent from a year earlier to 4.715 million tonnes, or 1.15 million barrels per day, rising slightly from the March level at 1.104 million bpd, according to data from the General Administration of Customs.
All oil producers participating in a deal to limit output agree on extending the cuts by nine months to help trim a supply glut, according to Saudi Arabia's energy minister.
"There are still negative pressures in the form of US crude production and inventories", said David Lennox, a resource analyst at Fat Prophets in Sydney.
West Texas Intermediate for July delivery slid as much as 48 cents to $50.65 a barrel on the New York Mercantile Exchange and was at $50.73 a barrel at 8:08 a.m.in London.More news: Manchester terror attack: Selfless residents drop everything to help victims
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I think there will be more of a tendency to keep the oil price in a $50 - $60 range rather than expecting it to rise dramatically. But it also spurred growth in the US shale industry, which is not participating in the output deal, thus slowing the market's rebalancing.
Algerian Energy Minister Noureddine Boutarfa said on Tuesday that OPEC was discussing a possible nine-month extension, with curbs kept at the same level as under the group's existing deal. Iraq, OPEC's second-largest and fastest-growing oil producer, had until Monday voiced support only for a six-month extension.
Al-Falih added that they believe that continuing with the same amount of cuts, plus adding one or two small producers if they wish will be more than enough to bring the five-year balance to where they need to be by the end of the first quarter 2018. That's 6.2% higher than the price reached on the day of OPEC's last meeting on November 30.
Prior to Pradhan's departure for here on Sunday, Petroleum Ministry officials in New Delhi said India's strategy at the OPEC meeting would be to leverage its massive market size for better terms like discounts and longer credit period.
"On the market there is an understanding that the demand for oil will increase by the end of 2017 by approximately 1 million barrels, and will completely block the continued, but slower growth of shale production in the United States", - said in his turn, Peter Pushkarev, chief analyst at TeleTrade.
Both contracts plus WTI futures for July delivery, which will soon be the U.S. front-month, closed at their highest levels since April 18. That would put about 74,000 bpd of additional oil into the market, a fraction of current US production of 9.3 million bpd.