Oil resumed its slide on Monday as investors remained uncertain whether producing nations would extend an OPEC-led output cut beyond the end of June in an effort to reduce a global glut of crude.
On Sunday, a committee of ministers from OPEC and outside producers agreed to look at prolonging the deal, stopping short of an earlier draft statement that recommended keeping the measure in place.
Oil prices have been falling since the middle of the month, as a spate of reports showing stronger-than-expected growth in U.S. inventories sparked selling from speculators that had built record long positions in crude futures.
Last week’s futures data showed speculators were still unwinding long positions as high U.S. inventories offset cuts from other oil producers. Long positions as of last Tuesday were at their lowest since December.
A number of ministers from the Organization of the Petroleum Exporting Countries and other producers met in Kuwait to review progress of their supply cut.
“When you look at the last two-and-a-half weeks we’ve moved into a sliding pattern vs. the sideways trend we have seen for much of the year,” said Michael Train, director of global energy strategy at RBC Capital Markets.
U.S. crude was down 33 cents at $47.63 a barrel, a 0.7 percent drop, as of 1:56 p.m. EDT. International benchmark Brent crude fell 17 cents to $50.63. Brent’s session low was $50.03.
The discount of U.S. crude to Brent has grown to around $2.90 per barrel, heading for its widest close since late 2015. That could result in U.S. producers sending more barrels overseas to take advantage of appetite for cheaper U.S. crude and help draw down stocks.
In December, OPEC and 11 other producers including Russia agreed to reduce combined output by almost 1.8 million barrels per day in the first half of this year.
While many in OPEC have called for prolonging the curbs, Russia has been less definitive. Energy Minister Alexander Novak said on Sunday it was too early to make that call. Some analysts believe that the backward-looking nature of U.S. inventory figures understate the oil market’s rebalancing.
“We believe that the rebalancing of the oil market is making progress, despite the record high US crude inventories with non-crude US inventories and non-US inventories down year-over-year,” analysts at Goldman Sachs wrote Monday. They said cuts may not need to be extended.