By Jenny W. Hsu 
 

Crude futures made moderate gains in Asia on Friday as larger-than-expected growth in U.S. crude stocks and production were overshadowed by news that the Organization of the Petroleum Exporting Countries could consider extending its production cuts for more months.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $53.48 a barrel at 0202 GMT, up $0.12 in the Globex electronic session. April Brent crude on London's ICE Futures exchange rose $0.13 to $55.78 a barrel.

On Thursday, Reuters reported that OPEC sources said the cartel could extend the six-month deal to cut supply, or make more severe cuts, if oil stocks don't drop by around 300 million barrels.

According to the OPEC's latest oil report, commercial oil stocks of the Organization for Economic Cooperation and Development countries fell by 33.8 million barrels in December for the fifth consecutive month, but at 2.9 billion barrels, it is still around 13 million barrels above the level a year ago and 299 million barrels above the latest five-year average.

OPEC, along with other key oil producing countries including Russia, agreed late last year to cut output by around 1.8 million barrels a day, equivalent to around 2% of global production. The agreement included the possibility to extend the cuts by another six months.

The January data showed OPEC crude supply decreased by 890,000 barrels a day to average 32.14 million barrels a day, indicating a 90% compliance rate by the participating countries.

A person close to Saudi Arabia's oil ministry said the kingdom, the world's largest oil exporter, was taking a wait and see approach to whether OPEC should extend the deal. It is too soon to tell whether the cartel will extend its agreement at its next meeting in May, the person said.

"This is not deemed sufficiently surprising," said Tim Evans, a Citi Futures analyst, who said more clarity should ensue after the monitoring committee meets again in late March.

Talks of possibly extending the supply cut time frame come at time when the U.S. production is showing a strong revival. U.S. production is predicted to average 9.0 million barrels a day this year and grow another 500,000 barrels a day next year.

However, some analysts such as Vyanne Lai at National Australia Bank are forecasting a much faster growth rate, putting this year's production at 9.3 to 9.4 million barrels a day.

She said the price collapse in the past two and a half years have prompted U.S. oil producers to invest more money on innovation and efficiency. Currently, some big U.S. oil companies have reduced their break-even cost at $30 per barrel, while average-sized oil companies can profit when oil prices sustain at around the $50 level.

"U.S. shale producers have a tendency of responding quickly to a period of sustained stability in prices," she said.

Nymex reformulated gasoline blendstock for March--the benchmark gasoline contract--rose 1 points to $1.5248 a gallon, while March diesel traded at $1.6287, 4 points lower.

ICE gasoil for March changed hands at $493.00 a metric ton, up $2.00 from Thursday's settlement.

Write to Jenny W. Hsu at jenny.hsu@wsj.com

(END) Dow Jones Newswires

February 16, 2017 22:35 ET (03:35 GMT)