Brent and WTI futures are down about 17 per cent so far this year despite Opec efforts to support prices.
After dipping below $44 Friday, futures pared some of this week's 6.5% plunge. Market volatility and trading volumes surged.
"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.
While the group has implemented the curbs, a rebound in US shale output and stubbornly-high stockpiles show the world's three-year crude glut isn't shifting. The result has been an 11-week expansion of American production, the longest run of gains since 2012.
Oil market volatility, as measured by the CBOE/Nymex Oil Volatility Index, jumped to the highest level since December. USA gold futures GCcv1 fell 0.02 percent to $1,228.30 an ounce.
But by 10:30am EST, oil prices began to lift, with WTI trading up 1.43 percent on the day at $46.17 and Brent Crude trading up 1.51 percent on the day at $49.11-still below that important $50 threshold. Although prices are now mired below their 200-day averages, after dropping ~15 percent from mid-last month, some bargain-hunting has entered into the fray at the end of the week. It fell 4% on Thursday. But weekly declines of close to 10 percent were all but halved during trading hours in NY.
Oil prices stabilized in Asian trading Friday after hitting a five-month low while regional stock benchmarks headed lower in holiday-thinned trading.
Emerging markets were also caught in the commodities sell-off.
The selloff on Thursday was also due to "broad macro concerns regarding the Chinese economy". "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.
Novak has said Russian Federation is inclined to prolong the accord. They had to duck for cover overnight as both Brent and USA crude prices fell more than 3 percent to below $47 a barrel at one stage on mounting concerns about global oversupply.
Opec sources said yesterday that Opec is likely to extend cuts when it meets on May 25 but that a deeper cut is unlikely.
Oil prices have risen but stockpiles are still high and production from countries that have not agreed to the cut, including the United States, has been rising, keeping crude below the $60 level that OPEC kingpin Saudi Arabia and others would like to see.
"Clearly, the faith in the OPEC and non-OPEC deal has just been obliterated".