Oil languishes after OPEC fails to deepen supply cuts, Asia stocks retreat

FTSE 100 set to follow Wall Street, Asia and open higher

Earlier in May both Saudi Arabia and Russian Federation, which is not a member of OPEC but is seen as a critical part of any potential agreement, said they backed extending the production cuts until March 2018.

On the other hand, India, the third largest consumer of oil, is contemplating importing oil from USA and Canada if OPEC countries continue the output cut.

The decision, announced Thursday by a high-level meeting of OPEC and non-OPEC ministers, means that the reductions of 1.8 million barrels a day agreed on in November will stay in place until March.

"In this regard, the aforementioned non-OPEC countries made a decision to extend their production adjustments, which originally started 1 January 2017, for a further period of nine months, beginning 1 July 2017", OPEC said.

Oil prices edged up on Friday but markets remained on the back foot after tumbling in the previous session when OPEC and allied producers extended output cuts but disappointed investors betting on longer or larger curbs.

Oil prices dropped more than 4 percent as the market had been hoping oil producers could reach a last-minute deal to deepen the cuts or extend them further, until mid-2018. "We even considered options for higher cuts", he said during the Vienna meeting.

European stocks are mixed in mid-day trading Friday following disappointment that Thursday's OPEC meeting failed to produce bigger supply cuts.

But the extension had been widely expected, and traders realized that the robustness of U.S. shale-oil production could undermine OPEC's cuts.

On the New York Mercantile Exchange crude futures for July delivery fell 0.10% to $48.85 a barrel, while on London's Intercontinental Exchange, Brent was last quoited up 0.12% to $51.33 a barrel.

OPEC ministers were forced by Texas shale oil producers on Thursday to extend a supply cut into 2018, a regulator from the USA state said.

US oil production C-OUT-T-EIA has risen more than 10 percent since mid-2016 to more than 9.3 million bpd.

In general, the oil supply remains high which has, and will, offset OPEC's output cut effort to an extent.

According to a statement, OPEC and the non-OPEC parties "recognized the need for continuing cooperation among oil exporting countries in order to achieve a lasting stability in the oil market".

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