Why oil markets could turn volatile this week?

 Ministers from the Organization of the Petroleum Exporting Countries, Russia and other producers meet in Vienna on Friday and are due to consider extending output cuts that began in January.

OPEC and its allies have agreed to reduce output by about 1.8 million barrels per day (bpd) until March 2018 in an attempt to empty inventories. But oil markets remain amply supplied due to the exemption of OPEC members Libya and Nigeria and a lack of compliance by others, triggering calls for stricter or extended cuts.

"Exempt members Libya and Nigeria may be brought into the fold of the production cut deal," said Jeffrey Halley, senior market analyst at futures brokerage OANDA.

Kuwaiti Oil Minister Essam al-Marzouq said on Thursday that compliance with OPEC-led oil output cuts was "very good" and above 100 percent.

Many analysts now expect OPEC to extend the deal, possibly to the end of next year.

OPEC's efforts have been hampered by higher production in some other parts of the world, including the United States, where shale oil production is reaching record highs.

Recent hurricanes in the Gulf of Mexico have also pushed up crude oil inventories in some parts of the United States as U.S. refineries have been shut by flooding.

--News from www.cnbc.com