Oil edges up as Saudis reported to back extension of production cuts

Oil futures drooped on Wednesday, after eight straight upward sessions of gains after USA crude inventory data suggested that the market was still heavily supplied.

Traders focused on preliminary USA production estimates in the weekly Energy Information Administration (EIA) report that suggested domestic output is still climbing.

U.S. West Texas Intermediate (WTI) CLc1 gave up 15 cents, or 0.3 percent, to $52.93 a barrel, after having touched a five-week high of $53.23 a barrel.

US crude inventories hit a record 535.5 million barrels this month.

Brent crude, the global oil benchmark, rose 0.64% to $56.59 a barrel on London's ICE Futures exchange.

However, OPEC also raised its forecast for supplies from non-member countries in 2017 as higher prices encourage US shale drillers to pump more, reducing demand for OPEC's oil this year.

Despite OPEC's cuts, oil producers around the world still put out 430,000 barrels a day more than worldwide markets could absorb in the first quarter, according to the report.

"Positive momentum continued in the country's private sector as suggested by Stanbic IBTC Bank Nigeria PMI", OPEC said in its monthly report.

USA crude inventories hit a record 535.5 million barrels C-STK-T-EIA this month.

Despite this, there are still some concerns that oil markets remain bloated and oversupplied, especially in the United States where both production and inventories are surging.

The threat from USA shale was laid bare in the report, however, with OPEC analysts increasing their forecast for U.S. production growth by 200,000 bpd to 540,000 bpd this year.

Helping to bolster money mangers' expectations of higher crude oil prices in the coming months, OPEC supplies continue to support stronger prices as well.

After breaking a six-day gaining streak on Wednesday, crude oil prices opened lower on April 13 but regained strength.

The report released Monday by Citi's Edward Morse and other analysts says the oil market is ready for "a hefty draw that should take Brent to over $60 per barrel, but producers will have to extend their production agreement through year-end".

However, OPEC also raised its forecast for supplies from non-member countries in 2017 as higher oil prices encourage US shale drillers to pump more, reducing demand for OPEC's oil this year.

OPEC meets on May 25 to consider extending the cuts beyond June.

SINGAPORE/TOKYO, April 12 The world's top oil exporter Saudi Arabia has stepped up sales of light oil to Asia by offering buyers more cargoes on top of the full contract volumes it will provide for May, industry sources with knowledge of the matter said on Wednesday.

  • Zachary Reyes