OPEC Meeting on Friday

[dan_s]

Ministers from the Organization of the Petroleum Exporting Countries, Russia and other producers meet in Vienna on Friday and are due to consider extending output cuts that began in January.

OPEC and its allies have agreed to reduce output by about 1.8 million barrels per day (bpd) until March 2018 in an attempt to empty inventories. Many analysts now expect them to extend the deal, possibly to the end of next year.

The structure of oil futures prices suggests OPEC production cuts are beginning to have an impact.

Front-month Brent futures have risen sharply in recent months, much more than forward prices. This has changed the Brent price curve, moving it into what traders call "backwardation", when prices for immediate delivery are higher than prices for later barrels.

The shift is seen as an indicator of a tightening market as it encourages the immediate sale of oil rather than holding it in storage.