| SINGAPORE, Sept 29
SINGAPORE, Sept 29 Oil futures extended gains on
Thursday after rising nearly 6 percent the day before on a
surprise move by OPEC to curb crude output.
The Organization of the Petroleum Exporting Countries agreed
to limit its production to a range of 32.5-33.0 million barrels
per day (bpd) in talks held on the sidelines of an energy
conference in Algeria.
But how much each country will produce is to be decided at
the next formal OPEC meeting in November, when an invitation to
join cuts could also be extended to non-OPEC countries such as
"The decision really took market by surprise - prices took a
big leap, now there's pause for reflection," said Ben Le Brun,
markets analyst at Sydney's OptionsXpress.
"An agreement to have an agreement - I don't know where that
leaves us," he said.
A drop in U.S. crude stocks for the fourth straight week
also supported oil prices.
U.S. West Texas Intermediate (WTI) crude had risen 28
cents to $47.33 a barrel by 0020 GMT, after closing the previous
session up $2.38, or 5.3 percent.
Brent crude climbed 31 cents to $49.00 a barrel,
having settled up $2.72, or 5.9 percent.
"More cynical traders have pointed out the complete lack of
detail, including the potentially problematic question of which
nations will curtail production," said Michael McCarthy, chief
market strategist at Sydney's CMC Markets.
"A 6-percent jump in crude prices makes a nice headline, but
is within normal bounds for the currently highly volatile energy
markets. Although this rally may quickly fade, energy stocks are
likely to receive a boost at this morning's opening," McCarthy
OPEC will agree to production levels for each member country
at its Nov. 30 meeting in Vienna, group officials said.
That came as U.S. crude stocks fell 1.9 million barrels to
502.7 million barrels in the week to Sept. 23, against analyst
expectations for a 3 million barrel increase, data from the U.S.
Department of Energy's Energy Information Administration showed.
"U.S. crude oil inventories are at historically high levels
for this time of year," EIA said in a statement.
Inventories were expected to rebound after the big drop a
few weeks ago, but instead stocks have continued to decline with
While oil prices remained range-bound at between $40-50 a
barrel, a push beyond $50 barrel could see "shale oil producers
turn the taps back on", said Le Brun at OptionsXpress.
"If this proposed (output) cut is strictly enforced and
supports prices, we would expect it to prove self defeating
medium term with a large drilling response around the world,"
Goldman Sachs said in a note.
(Reporting by Keith Wallis; Editing by Joseph Radford)