Crude oil futures gained in Asia on Friday as investors looked ahead to U.S. rig count figures for insight on domestic output and ahead to a weekend meeting to further detail planned production cuts by OPEC and Russia.
February crude futures on the New York Mercantile Exchange rose 0.37% to $51.03 a barrel. Global benchmark Brent futures on the Intercontinental Exchange gained 0.07% to $53.93 a barrel.
Overnight, oil prices climbed back above $50 on Thursday as investors looked ahead to a meeting between OPEC and non-OPEC producers this weekend to finalize the details of a planned output cut.
The Organization of the Petroleum Exporting Countries last week announced an agreement to cut output by 1.2 million barrels per day that will effect from January 2017.
Oil producers are to hold talks in Vienna on Saturday to see to see whether non-OPEC members, including Russia, will cut production by an additional 600,000 bpd. Russia has pledged to “gradually” reduce production by 300,000 bpd next year. But doubts have emerged over how effective the cuts will be at rebalancing the market and reducing massive oversupply that has pressured prices lower for more than two years.
Oil production has been outstripping consumption by between one to two million barrels per day since late 2014. While OPEC’s agreement boosted oil prices to 16-month highs this week, some remain skeptical on the ability of major producers to adhere to output limits.
OPEC and Russia have reported that output hit record highs since the deal was announced, adding to fears that the global supply overhang could persist well into 2017.
Some analysts have also warned that the cuts are likely to cause other producers, particularly U.S. shale drillers, to quickly ramp up output as prices rise.