Oil prices fall as White House proposes US oil reserve sales

During the painful oil price war of the last couple of years, Opec and Russian Federation collectively increased production by nearly 4 million b/d since mid-2014, sending WTI crude oil prices spiralling down to $26/bbl, said the BofAML report. "Quarterly growth of real gross domestic product (GDP) in the OECD area decelerated sharply to 0.4% in the first quarter of 2017, compared with 0.7% in the previous quarter, according to provisional estimates", the Organisation for Economic Co-operation and Development (OECD) said on Tuesday. OPEC oil ministers will meet on Thursday in Vienna to discuss the extension.

In fact, the U.S. Energy Information Administration (EIA) expects "OPEC net oil export revenues will rise to about $539 billion dollars in 2017, versus 2016". According to 5.49 MSK, the cost of July futures for Brent crude on London exchange ICE increased nearly percent, rising to $54,07 per barrel.

OPEC members and Russian Federation will meet on Thursday and are expected to extend the production cut agreement.

"Clearly there is positive momentum in the oil market as it is continuing to price the OPEC deal", said Jens Naervig Pedersen, a senior analyst at Danske Bank A/S in Copenhagen.

Oil rose to the highest in a month as Saudi Arabia said all producers participating in output cuts agree on extending the deal through the first quarter of 2018.

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"It will complicate the OPEC efforts to stabilize the market", said Anas Alhajji, an independent oil analyst and economist in the Reuters Global Markets Forum following the announcement.

"The Saudi statement that everyone agreed to a nine-month extension spurred optimism that the cuts will do something to correct the over-supply scenario", Gene McGillian, manager of market research for Tradition Energy in Stamford, Connecticut, said by telephone.

While the West Texas Intermediate Crude for June delivery rose 55 cents, or 1.09 percent to 50.88 a barrel.

Saudi Arabia is calling for an extension of the current agreement on global oil supply cuts.

If Opec hikes output, oil prices could collapse to $35/bbl.

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EUR/USD pushed to fresh 6-month highs near 1.1250 ahead of the US open with the weak dollar providing further net support to oil prices.

In November the OPEC countries and who joined them, agreed to cut production by 1.2 million barrels a day.

Gordon Kwan, head of regional energy research at Nomura, said deeper production cuts of more than 2 million barrels a day may be on the card as Saudi Arabia is showing signs of impatience with the pace of rebalancing, which is happening slowly as USA producers have stepped up output this year.

Iraq is the second largest oil producer in the OPEC.

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