– This is the script of CNBC's news report for China's CCTV on May 17, Wednesday.
Welcome to CNBC Business Daily, I'm Qian Chen.
Overnight, officials in Kuwait, Iraq and Venezuela all voiced support for extending a crude output cut by OPEC and other producing countries.
Oil prices surged on Monday morning following a joint commitment on Sunday from Saudi Arabia's and Russia's energy ministers to extend the existing oil production cut agreement until March 2018.
However, oil prices fell overnight due to investors' profit-taking trade as well as suspicion of how effective the extension would be.
During the Asian trading session this morning, we saw prices falling even furthur.
In the latest report published by Goldman Sachs, the bank predicts that the deal would likely further extend the oil price rebound started last week, but the rally is gonna be modest compared to the move that occurred last year when the OPEC cuts were first announced.
Remember, after the OPEC agreement last November, oil prices surged by 15% in the following two days.
Now, investors will watch closely on inventory data reported by the U.S. Energy Information Administration on Wednesday, as well as Iran's election on Friday.
Now, one big challenge for OPEC's production cut to work, is the faster-than-expected surge of U.S. oil supply. Goldman Sacks said that U.S. oil production is up more than 10 percent since mid-2016. And in IEA's latest monthly report, it revised upwards its expectation throughout 2017 and now expected total US crude production to exit the year 790 thousand b/d higher than at the end of 2016.
Meanwhile, Iranians will head to the polls on Friday to choose their new president in an election being closely watched by traders due to the consequences at play for the country's nuclear deal and oil supply.
CNBC's Qian Chen, reporting from Singapore.