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How OPEC can get oil prices back to $60 a barrel

Oil traders are eagerly anticipating an extension to OPEC's production cut this week, but one analyst has told CNBC that comments from the oil cartel could be just as powerful in propping up the price of the commodity.

"A lot depends on this meeting, at least in the wording," Amrita Sen, chief oil analyst at Energy Aspects, said Wednesday when asked whether oil could surge to $60 a barrel after OPEC's meeting on Thursday.

"Even if they (OPEC) don't do extra cuts, it's very important to come out and say: 'Look, we are going to concentrate on the exports', and not just say it, actually do it," she added.

Sen explained that the only way that oil producers can get "visible inventories" to fall would be by cutting exports, as opposed to just production. This would mean that countries like Saudi Arabia would draw down their own oil stocks, which would subsequently mean consumers drawing down on these oil reserves. This would provide a quicker fillip to the oil price, rather than continuing to export at the same rate and just cutting production, she suggested.

"Summer demand is picking up, refineries are back, if they can get it right, if they can cut exports I do think we see 60 (dollars a barrel) by late Summer," Sen added.

In December, OPEC and 11 non-members, including Russia, agreed to cut output by about 1.8 million barrels per day in the first half of 2017. The decision has pushed oil prices back above $50 per barrel. However, the U.S. shale industry has also grown since then, which challenges OPEC's efforts to rebalance the oil market and has weighed on prices.

Saudi Arabia said earlier this year that it wants to see oil prices back near $60 a barrel in 2017. On Wednesday morning, Brent was 0.2 percent higher trading at $54.26 a barrel and WTI was up by 0.16 percent at $51.55 a barrel.

Ahead of Thursday's crucial meeting, Algerian Energy Minister Noureddine Boutarfa said Tuesday that OPEC was discussing a possible nine-month extension to oil output cuts, according to Reuters. However, the news agency also reported that UAE (United Arab Emirates) Energy Minister Suhail bin Mohammed al-Mazroui said OPEC is debating whether to extend oil output cuts by six or nine months.

"Nine months is a good start because everyone has been expecting six," Sen told CNBC Wednesday.

"But I think that the market now, given they announced nine months already a few weeks ago, is expecting a little bit more, maybe deeper cuts, maybe at least keeping the door open possibly for more cuts if inventories don't fall," Sen added.