The group's decision to pull back on production helped to bolster oil prices above the $50 per barrel mark, but OPEC still needs to decide whether or not those cuts will continue beyond June of this year.
The West Texas Intermediate for May delivery decreased 1.97 USA dollars to settle at 50.44 dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery lost 1.96 dollars to close at 52.93 dollars a barrel on the London ICE Futures Exchange.
On Wednesday, the Organization of the Petroleum Exporting Countries' Secretary-General Mohammad Barkindo called on all non-OPEC producers who aren't part of the output-cut agreement to join the pact, according to a news report from Platts.
Crude palm oil prices declined by 0.55 per cent to Rs 481 per 10 kg in futures trading today as speculators engaged in reducing positions, triggered by easing demand in the spot market.
"With a continuation of the OPEC and non-OPEC producer deal in the second half of 2017 and the expected associated inventory draw-down, we expect oil prices to move above $60 a barrel by the second half of the year", Citi analysts wrote. Under the deal, OPEC is curbing its output by about 1.2 million barrels per day from January 1 for six months in an attempt to eradicate a supply glut. However, any interpretations of an oversupplied market moving towards a balance become questionable if product stocks start rising, especially gasoline, which should now be seeing a seasonal hump in demand. Before the cuts were announced, the term structure of the WTI oil futures curve was in contango (prices are higher in the near-future). The real factors in Citi's outlook are the familiar ones: OPEC cuts and USA shale production. This month, the market is beginning to digest the fact that OPEC may need to extend the cuts to have any effect at all on supply. An extension of the current deal to cut production is more or less priced in but as the price rallies, the urgency among Opec members to extend is likely to fade.
USA stocks opened higher on Wednesday, aided by gains in financial and consumer discretionary stocks.
USA crude production rose to 9.252 million barrels per day from 9.235 million barrels in the week prior, continuing a strong rebound, according to EIA.
Tuesday evening the American Petroleum Institute (API) reported that crude inventories fell by 840,000 barrels in the week ending April 7.
"With questions hanging over US gasoline demand, any further product builds will act as a brake on the oil price recovery", he said.
Oil edged higher on Wednesday as OPEC said it was committed to eroding a global surplus of crude, but increasing shale production in the United States and still-high global stocks threatened to pull prices lower. Opec's average compliance for 2017 is 99%, it said.
Here is a look at how share prices for two blue-chip stocks and two exchange traded funds reacted to this latest report.
USA gasoline stockpiles rose by 1.5 million barrels last week, defying market consensus of a 2-million decline, according to the weekly report released by the Energy Information Administration (EIA) Wednesday. EIA's Annual Energy Outlook 2017 Reference case projects that US tight oil production will increase in the coming decade, accounting for most of total USA oil production.