Oil slips as U.S. production threatens OPEC-led output pact

Oil prices finished with a modest loss on Thursday, a day after a big
rally, as rising output from the U.S. remained a threat to efforts by
other major producers to rebalance the market.

Still, prices
continued to find some support following data Wednesday showing the drop
in U.S. crude supply in 10 weeks, as well as weaker dollar in the wake
of the Federal Reserve’s less-hawkish-than-expected rate announcement.

Oil
prices also briefly traded higher in the last hour before the
settlement, buoyed comments from Khalid al-Falih, Saudi Arabia’s energy
minister, who said output cuts led by the Organization of the Petroleum
Exporting Countries may be extended if necessary, according to Bloomberg
News. The market also saw volatility tied to the day’s expiration of
April crude oil options.

“As options expire, the market
tends to gravitate towards an even number” and WTI prices made a
late-session attempt to climb toward $49, said Phil Flynn, senior market
analyst at Price Futures Group. The market was also “looking at Russia
and OPEC comments to get a sense of whether [its members and other major
producers] will extend production cuts.”