US crude settles at $53.36, up 25 cents, as OPEC signals possible output deal extension

US crude settles at $53.36, up 25 cents, as OPEC signals possible output deal extension
US crude settles at $53.36, up 25 cents, as OPEC signals possible output deal extension

Analysts say that the market is setting up for a possible fall if inventories do not start to decline soon.

"The market's response to yesterday's stats suggests it continues to focus on forward expectations of further rebalance through production cuts and increased demand, but doesn't have any oomph to push higher," said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut.

"But the massive overhang over oil and gasoline inventories continues to put doubts in the minds of the bulls."

The anticipation that OPEC's cuts - and surprisingly high level of adherence to those production reductions - will start to reduce inventories has kept traders heavily invested in futures contracts betting on more gains.

As of last week, non-commercial traders had a net long position of 477,000 U.S. crude contracts, just short of the previous week's level that represented a record long position in oil futures, according to data from the U.S. Commodity Futures Trading Commission.

— CNBC's Tom DiChristopher contributed to this report.

CNBC

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