Oil lifted by talk of output cut extension

European equities and US stock index futures are all firmer in early trade this morning, helped along by a continued pick-up in crude prices. Oil prices were up first thing, helped by renewed speculation that November’s agreement between OPEC and non-OPEC producers to cut output by close to 1.8 million barrels per day could be extended beyond the current June cut-off.

Oil steadied yesterday following a sharp sell-off on the open. This unnerved investors who were concerned that oil could be set for another leg down. However, oil now appears to be steadying, albeit at lower levels, following its dramatic plunge two weeks ago. This was triggered by the release of US inventory data which showed a much bigger-than-expected growth in stockpiles. Since then, however, the data has showed that inventories are declining once again and this has helped put a floor under prices for now. We’ll have an update from the American Petroleum Institute after tonight’s close.

Meanwhile, the euro is firmer this morning following last night’s French Presidential debate. The main takeaway seems to be that Marine Le Pen’s main opponents acquitted themselves well, reducing the possibility of the Euro sceptic candidate ultimately prevailing. The Dollar Index remains below 100, but this is seen as down to euro strength rather than dollar weakness. Consequently, the dollar’s move has failed to offer any support to gold or silver which are both modestly lower.