By Timothy Puko
Oil prices stabilized Thursday after a steep drop in the prior session, with promises of further cuts from the world's exporters countering fears of growing production coming from the U.S.
Light, sweet crude for May delivery settled down 17 cents, or 0.3%, at $50.27 a barrel on the New York Mercantile Exchange. It has lost 5.5% over four-straight losing sessions.
The May contract expired at settlement. The more actively traded June contract settled down 14 cents, or 0.3%, to $50.71 a barrel.
Brent crude, the global benchmark, gained 6 cents, or 0.1%, to $52.99 a barrel on ICE Futures Europe. It snapped a three-session losing streak.Most of oil's recent losses came when they fell by almost 4% Wednesday alone, the steepest drop since March 8. The decline was triggered by the surprise build in U.S. gasoline stockpiles that point to weaker-than-expected demand at a time when consumption of gasoline usually rises.
By Thursday morning U.S. time, Saudi Arabia's energy minister had publicly said the Organization of the Petroleum Exporting Countries is likely to reach an agreement to extend recent production cuts into the second half of 2017. The group committed last year to cut about 1.2 million barrels of oil a day in a bid to bring a vast global oversupply of crude back in line with demand and thus raise petroleum prices.
The market did, however, retreat some later and U.S. oil ended lower for the day. There is still more than a month before OPEC meets and may make a deal official, and technical trading also played a role, said Phil Flynn, senior market analyst atthe Price Futures Group in Chicago.
"People don't like to step in and buy the day after a selloff, and on expiration day. Expiration days are typically sort of crazy," Mr. Flynn said.
At an energy conference in Abu Dhabi, Saudi Arabia's energy minister Khalid al-Falih hinted at the extensive behind-the-scenes negotiations among big oil producers ahead of the group's meetings scheduled for May. He said a preliminary agreement to extend the cuts had been reached, but it still needed final signoff from some OPEC members.
"Saudi's done a good job of managing the rhetoric," said Michael Hiley, a trader at LPS Futures LLC. "Every time this market looks like it's in dire trouble, the Saudis and OPEC do a pretty good job of getting supportive comments out."
Slight production reported Wednesday also reinforced widespread anxiety that U.S. shale producers are becoming more capable in churning out oil at a lower price, analysts say. That is still holding prices in check Thursday, said Mark Waggoner, president of brokerage Excel Futures.
"There's higher rig counts, supply seems to be building a little bit," he said. "We're probably going to go down in the short-term."
Latest data from the Energy Information Administration showed U.S. output rose to 9.25 million barrels a day last week, the highest level since August 2015.
Gasoline futures gained 0.7% to $1.6705 a gallon, snapping a six-session losing streak. Diesel futures lost 0.2% to $1.5789 a gallon, its fifth-straight losing session.
and Jenny W. Hsu contributed to this article.
Write to Timothy Puko at email@example.com
(END) Dow Jones Newswires
April 20, 2017 16:00 ET (20:00 GMT)
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