Oil strengthens on speculation OPEC may extend output cut agreement

Oil prices rose in Asia on speculation that OPEC may extend the output cut agreement beyond June to support prices.

At the time of writing, WTI Oil was up 19 cents or 0.40% at $49.10/barrel. Brent Oil was up 21 cents or 0.40% at $51.83/barrel. As per the current deal, OPEC members along with Russia are seen reducing the output by almost 1.8 million barrels per day (bpd) between January and June.

The OPEC group is seen extending the deal, although there is still some doubt as to whether Russia and other non-OPEC major producers would agree to do the same. Speculation is also rife that oil demand is set to rise in 2017.

However, rising US supplies could easily play a spoilsport. The American Petroleum Institute (API) weekly inventory data is due for release today.