US oil prices extend gains as equities rise, but economic worries weigh

US oil prices extend gains as equities rise, but economic worries weigh

The U.S. benchmark crude is on track for a 13 percent decline this month.

"But market confidence needs to be restored for oil price...that includes an equity market rebound and/or a bigger production cut from major oil exporters", Yang said, referring to an Opec-led agreement to lower output starting next month.

U.S. west crude futures fell $1.07, or 2.35 percent, to reach $44.52 a barrel, up from the lowest level since September 2017 at $44.41 a barrel.

Officials from Iraq, Kuwait and the United Arab Emirates agreed with Saudi Arabia's expectation that the group, along with Russian Federation and other oil producers, will extend the agreement for another six months.

"As stocks get taken down and there is nervousness across financial markets, it's just undercutting prices here", said John Kilduff, a partner at New York-based hedge fund Again Capital.

Still, the macroeconomic picture and its impact on oil demand continue to pressure prices.

"What if the 1.2 million barrels of cuts are not enough?" A recovery in the US stock markets could help drive prices higher because of a shift in investor sentiment, but these gains are likely to be limited by rising concerns over a global economic slowdown.

After a turbulent eight weeks, during which crude oil lost almost 30 percent of its value, a last minute deal between countries of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC countries to cut production is expected to lend some stability to the market. That follows the United Arab Emirates energy minister's remarks signaling the producers could have an extraordinary Opec meeting and discuss additional curbs if needed.

"The main input over the weekend has been the continued intervention by OPEC members", said Olivier Jakob, managing director at Petromatrix.

OPEC and other major oil producers negotiated to cut oil production by nearly 1.2 million barrel a day, in the first week of December. Bloomberg quoted a Rakuten Securities analyst as saying, "There are several bearish factors in oil markets, and the situation won't improve anytime soon".

February Brent LCOG9, +8.70% the global benchmark, rose $4, or 7.9%, at $54.47 a barrel.

West Texas Intermediate crude for February delivery climbed $1.51/bbl to $44.04/bbl at 9:50 a.m. on the New York Mercantile Exchange.

Crude-oil futures snapped back by some 8% on Wednesday, to break a string of three straight declines, after closing the pre-Christmas session at their lowest since July 2017.

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