Oil steadies as Saudi energy minister hints at extension to Opec's cuts

Crude oil prices have stabilised as an extension to the Organisation of the Petroleum Exporting Countries' (Opec) deal looks increasingly likely.

However, despite extending gains that began Friday, the price of global benchmark Brent crude is still hovering below $50 a barrel.

"Both Brent and US benchmarks have failed to overcome key support turned resistance levels as $50 and $47 respectively. Investors will once again be on the lookout for any further commentary from Opec that an extension of its six-month production cut is in the offing following comments of that nature from de facto leader Saudi Arabia last week," said analysts at Accendo Markets.

Brent was trading 0.37 per cent higher at $49.28 per barrel while West Texas Intermediate (WTI) prices were 0.19 per cent higher at $46.31 per barrel at the time of publishing.

Saudi Arabia's energy minister, Khalid Al-Falih, today said oil markets are rebalancing after years of oversupply, but he still expects the cartel's deal to cut production for the six months to June to be extended for the whole of 2017.

"Based on consultations that I've had with participating members, I am confident the agreement will be extended into the second half of the year," said Al-Falih during an industry event in Malaysia, according to Reuters.

Rising production in the US has spurred fears that Opec's cuts aren't doing enough to cut the global supply glut.

Opec will decide whether to extend the deal among members and non-members to cut output by 1.8m barrels per day when they meet on 25 May.

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