New York (Reuters): Oil prices edged down in a volatile trade on Monday despite Saudi Arabia's oil minister saying that he expected OPEC and its partners to consider extending their deal to cut supply possibly into next year to end a global glut.
Growing US drilling and production have played a role in undermining the efforts of the Organization of the Petroleum Exporting Countries and non-OPEC producers, such as Russia, to reduce global oil inventories with an output cut of 1.8 million barrels per day (bpd) during the first half the year.
Saudi Energy Minister Khalid al-Falih said oil producers would "do whatever it takes" to rebalance the market and that he expected a global deal on cutting crude output to be extended through all of 2017 and possibly into next year.
Brent crude was down 8 cents at $49.02 a barrel at 1:45 p.m. EDT (1745 GMT). US light crude was down 6 cents at $46.16 a barrel.
"The market is getting tired of hearing from OPEC how good they are, how compliant (with supply curbs) they are and especially how all their projections for inventories falling seemed to be moved into the future," said Eugen Weinberg, head of commodity research at Commerzbank.
"Those claims do not withstand the reality check with the inventories staying stubbornly high and non-OPEC production rising strongly."
If the supply curbs are extended, then OPEC will likely struggle to keep its members adhering to the their output targets, Weinberg said.
"Compliance rates, in my opinion, will not be as high as they were in past months." The Saudi oil minister said recent price falls had been caused by seasonal low demand and refinery maintenance, as well as by non-OPEC production growth, especially in the United States.
US energy companies last week extended a recovery in oil drilling into a 12th month, energy services firm Baker Hughes Inc said on Friday.
US oil production has soared more than 10 percent since mid-2016 to 9.3 million bpd, its highest since August 2015 and close to the levels of top producers Russia and Saudi Arabia.
Many analysts now see US crude output heading toward 10 million bpd over the next year.