By Jon Sindreu and Biman Mukherji 

Oil prices were little changed Wednesday, after five straight days of gains on the back of expectations that major producers will announce output cuts on Thursday.

Brent crude, the global benchmark, gained 0.2% to $54.26 a barrel. West Texas Intermediate for June delivery, meanwhile, traded flat at $51.47 a barrel on the New York Mercantile Exchange. If it closes at these levels, it would put an end to five straight days of gains, the longest winning streak since early April.

Oil has been on a roller-coaster ride since March, torn between concerns about mounting stockpiles and greater optimism regarding global demand. It has gained roughly 5% this month, buoyed by reports that Saudi Arabia is garnering support within the Organization of the Petroleum Exporting Countries for a potential nine-month extension of ongoing production cuts.

The American Petroleum Institute, a private industry group, said late Tuesday that crude and gasoline stockpiles in the U.S. declined last week. Drops are also anticipated to be seen in later Wednesday's government report.

According to Stephen Brennock, analyst at London-based brokerage PVM, the world's major oil producers "are almost guaranteed to extend production curbs" at Thursday's OPEC meeting in Vienna, after oil ministers from Saudi Arabia and Algeria expressed confidence that a deal would be struck.

If confirmed, "we will see a bounce in the market very quickly," said OM Financial's Stuart Ive, as "there are plenty of reasons to think that demand will be increasing." He thinks oil could get toward $65 by year's end provided there is compliance by all participants to the output cuts.

Members of the cartel want global inventories to fall back to their five-year average, analysts say, in order to ease fears about an oversupply in the market. In the long term, however, traders remain concerned that U.S. shale producers can ramp up production to offset any cuts by OPEC.

"The ability of the U.S. shale sector to revive itself, restructure at a corporate level, and bring back on tap incremental oil production is a deep challenge to OPEC's oil price policy," said Nizam Hamid, head of strategy in Europe at WisdomTree Investments, Inc.

Meanwhile, Nymex June gasoline futures were mostly flat at $1.6661 a gallon and ICE gas oil rose 0.3% to $480.25 per metric ton. Diesel, which through Tuesday had gained 10-straight sessions for the first time since New Year's 2010, added 0.4% to $1.6177 a gallon.

Write to Jon Sindreu at jon.sindreu@wsj.com and Biman Mukherji at biman.mukherji@wsj.com

 

(END) Dow Jones Newswires

May 24, 2017 07:57 ET (11:57 GMT)

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