TOKYO
(Reuters) - Oil prices extended gains on Tuesday after Saudi Arabia pledged to
curb exports from next month and OPEC called on several members to boost
compliance with output cuts to help rein in oversupply and tackle flagging
prices.
Gains were
also supported by a warning from Halliburton's executive chairman that the
growth in North America's rig count was "showing signs of
plateauing," a possible threat to U.S. shale oil production.
Global
benchmark Brent crude for September delivery was up 28 cents at $48.88 a barrel
by 0540 GMT after settling up 1.1 percent.
U.S. West
Texas Intermediate (WTI) futures were up 28 cents at $46.62.
In a meeting
in St. Petersburg on Monday, the Organization of the Petroleum Exporting
Countries (OPEC) and non-OPEC producers discussed extending their deal to cut
output by 1.8 million barrels per day (bpd) beyond March 2018 if necessary.
Saudi Energy
Minister Khalid al-Falih added his country would limit its crude exports to 6.6
million bpd in August, almost 1 million bpd below levels of a year ago.
Nigeria
voluntarily agreed to join the deal by capping or cutting its output from 1.8
million bpd, once it stabilizes at that level. Nigeria, which has been
producing 1.7 million bpd recently, had been exempt from the output cuts.
OPEC said
stocks held by industrial nations had fallen by 90 million barrels over January
to June, but were still 250 million barrels above the five-year average, which
is the target for OPEC and non-OPEC.
"Despite
the goals for rebalancing, the market is still not sure that inventories would
fall precipitously to achieve their target," said Tomomichi Akuta, senior
economist at Mitsubishi UFJ Research and Consulting in Tokyo.
Russian
Energy Minister Alexander Novak said an additional 200,000 bpd of oil could be
removed from the market if compliance to OPEC-led deal was 100 percent.
"In our
view ... these meetings were aimed at saving face and diverting the market's
attention away from Iraq's poor compliance, shale's resilience, and Libya's and
Nigeria's markedly higher output," Britain's Barclays bank said.
China's
crude imports will exceed 400 million tonnes (8 million bpd) this year and
likely grow by double digits next year, a Sinopec Group executive said.
U.S.
commercial crude oil inventories likely fell by 3 million barrels last week, a
preliminary Reuters poll showed ahead of a data release from the American
Petroleum Institute. [EIA/S] [API/S]
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