Crude prices plunged to a session low of $45.31, just shy of the November 30 low of $45.22, the day OPEC and other producers, including Russian Federation, agreed to cut output by about 1.8 million barrels per day (bpd) for a period of six-month months until June. "There is a possibility that oil could be headed to the low $40s range from here".
They have collapsed 9.3 percent this week, sliding to the lowest level since November 15 past year - two weeks before OPEC signed a six-month deal to curb production aimed at easing a global glut.
He points out that maintaining of the moratorium allows keeping prices at sufficiently high level - $50-55 a barrel or even approach to $60.
Both benchmarks started to trim earlier losses after Saudi Arabia's Opec Governor Adeeb Al-Aama told Reuters that Opec and non-Opec nations were close to agreeing a deal on supply cuts.
Late last year, the Organization of the Petroleum Exporting Countries (OPEC) and other producing countries announced oil output cuts of 1.8 million barrels per day (bpd) for the first six months of this year.
USA stocks also were lower, with losers led by the energy sector, which fell 2.24 percent to its lowest level since August. Elsewhere, Norwegian energy company DNO said market conditions supported expansions to its operations in the Kurdish north of Iraq.
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Rosneft PJSC, Russia's largest oil producer, said first-quarter profit climbed 8.3 percent as the effect of higher crude prices was offset by a stronger ruble and production cuts.
"There's disappointment that the production cuts we've seen from OPEC and others have not had any impact at this stage on global inventory levels", said Ric Spooner, a chief market analyst at CMC Markets in Sydney.
But many investors worry those efforts have been scuppered by rising shale production in the U.S. and falling demand in countries like China.
Moreover, the recent EIA report on United States crude oil inventory declining only by 900,000 barrels as against market expectation of a 2.3 million barrel decline continue to weight down on market sentiments.
But the market is getting a bit "jittery" as countries decide whether to extend those cuts, he said.
"The Opec members may extend their current production cut on the 25th May, but the market certainly wants to see more cuts".
Russia's energy minister said Thursday that the country thinks it will be necessary to extend its agreement with OPEC beyond June.