Oil prices rebounded on Friday after dropping to a one-month low the previous day, prompting investors to buy at cheaper levels ahead of a May OPEC meeting at which producers could extend output cuts.
Optimism is rising about the prospect of a year-long production curb deal, with most analysts polled by Reuters expecting the accord between the Organization of the Petroleum Exporting Countries and non-OPEC producers, struck at the end of last year, to be extended to the end of the year.
“OPEC … effectively said the production cut will be extended, meeting the reality of the restart of a big Libyan oilfield and the continued expansion of U.S. shale oil,” said Greg McKenna, chief market strategist at brokerage AxiTrader.
Friday’s oil price gains were also helped by a weaker dollar and signs that non-OPEC member Russia was fully compliant with output limits agreed among major producers late last year.
Benchmark Brent crude LCOc1 futures were trading up 44 cents at $51.88 a barrel by 1150 GMT. U.S. light crude CLc1 fetched $49.55 a barrel, up 58 cents.
Despite Friday’s gains, both contracts were set for their second straight weekly and monthly losses after Thursday’s price drop driven by news of the oilfield restarts in Libya.