Russia, one of the non-OPEC countries to sign up to the cuts, has signaled that Moscow is ready to extend the production cut agreement with the oil cartel.
"If OPEC comes out with a negative message and no cooperation the market might trade down to $45", Mr. Schieldrop said, adding that the expectation was that OPEC would take action to reassure investors that they aren't going to flood the market with oil. "The whole commodity complex has been affected by this and it could have some pretty big implications if it continues for much longer", said Saxo bank's head of FX strategy John Hardy. The contract sank 4.8%Thursday.
Mining giant Rio Tinto hit a six-month low, Glencore was set for its worst weekly loss in two months and copper miner Antofagasta since December.
CURRENCIES: The dollar weakened to 112.17 yen from 112.46 yen. Stocks have steadily declined for the last four weeks, but at 527.8 million barrels they are just 7 million barrels off a record high.
Both Brent and WTI futures are down about 17 per cent for the year so far despite the OPEC effort to support prices. The euro meanwhile touched six-months highs of nearly $1.10 ahead of France's weekend election, in which polls now expect centrist Emmanuel Macron to convincingly beat right-wing and anti-euro rival Marine Le Pen. The UAE, also under pressure from fellow OPEC members to come into compliance with its quota, lowered production slightly to 2.84 million barrels per day, down 10,000 barrels per day from March, the survey found.
"Any likelihood of an increase in the level of cuts remains slim with OPEC officials playing down this possibility", said James Woods, global investment analyst at Rivkin Securities.
Those elevated inventory levels have weighed on sentiment in recent weeks, contributing to a sell-off in the oil market that shaved about $8 off the price of benchmark USA crude in the last three weeks. Both had been nudged lower by the commodity market worries.
The pan-European FTSEurofirst 300 index .FTEU3 rose 0.69 percent and MSCI's gauge of stocks across the globe.MIWD00000PUS gained 0.36 percent after touching a record high. "The Fed will raise the federal funds rate again in mid-June as the economy is approaching full employment", said Gus Faucher, chief economist at PNC Financial in Pittsburgh.
Brent traded volumes on Thursday reached an all-time high of almost 542,000 contracts suggesting hedge funds had accelerated cuts in their long positions.
"A lot of global players didn't expect US production to be able to ramp up this quickly, at this price level", said Jenna Delaney, senior oil analyst at Platts Analytics.