Oil prices have regained some ground after multiple decreases but crude markets continue to remain volatile as traders lose confidence that the Organization of the Petroleum Exporting Countries’ (OPEC) pledged output cuts can put an end to global oversupply.
Brent crude LCOc1 gained 14¢ to touch $51.74 a barrel, while the US West Texas Intermediate (WTI) crude futures CLc1 climbed 14¢ and traded at $49.37 a barrel, reported Reuters.
Brent prices are 10% below its late 2016 level despite the ongoing efforts by OPEC members along with other oil producing nations to reduce output by 1.8 million barrels per day (bpd) for the first six months of this year.
JP Morgan told the news agency: “Crude markets are close to floating storage economics and this is a bearish sign for output price developments.”
JP Morgan also opined that OPEC may need to extend the deal beyond June to keep the price level above $50 a barrel level.
Russia said that its output can increase to the highest level in the last three decades if the oil cartel does not end its supply reduction deal past June.