Oil Futures Drop on US Supply Data
Oil futures continue to see sideways movement as CERAWeek convenes in Houston, Texas. Getty

As oil futures remain stubbornly stuck in the mid-$50 per barrel range, CERAWeek, considered one of the global oil and gas industry's signature events, convenes in Houston, Texas, USA. The vexing question on everyone's mind being whether or not Opec and 11 other non-Opec producers will extend their production cuts beyond the summer.

All eyes will be on what indication, if any, Saudi oil minister Khalid Al-Falih offers the market. Others from the Opec table, including Secretary General Mohammad Sanusi Barkindo, are also in attendance at CERAWeek. Canada, a leading non-Opec crude producer, will see its Prime Minister Justin Trudeau deliver a keynote speech.

The wider market also awaits a much anticipated public outing at CERAWeek by ExxonMobil's relatively new Chief Executive Officer Darren Woods, who stepped into replace Rex Tillerson, after the latter was appointed US secretary of state.

With no less than 20 energy sector CEOs expected to speak at the event alongside Woods, accompanied by over 20 high ranking government officials, including the energy ministers of India, United Arab Emirates and Russia, there would be soundbites aplenty to keep the oil market impressed.

Backdrop to the dialogue is currently being provided by a spate of long bets - i.e. calls that the price would rise - by money managers, including hedge funds, who believe an oil rally, largely predicated on Opec extending its production cuts beyond June, would materialise.

Should Opec decide to take such a course of action, the possibility of the oil market rebalancing by the third quarter of 2017 could increase. For the moment, oil market prompt prices have not seen the current kind of stability for several years, marking an end to two years of extreme volatility.

Of course, the reason for sideways movement appears to be the cancellation of the upside risk provided by Opec and non-Opec cuts, by the downside drag of rising US production. As reflected in drilling rig data, week after week, the latest tally from oilfield services company Baker Hughes, points to 257 more US rigs online compared to the same week in 2016, taking the country's tally to 756.

IBTimes UK will provide full coverage of CERAWeek proceedings from Houston, Texas, from 6 March to 10 March, 2017, with news, views, analysis and exclusive interviews.