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Oil trades near US$50 as Libya output rebound offsets Opec cuts
[NEW YORK] Crude traded near US$50 a barrel as a rebound in Libyan oil production and US supply gains countered optimism that Opec would continue to restrain output.
Futures in New York fluctuated after rising 5.5 per cent last week. Libya's output rose to about 660,000 barrels a day as the Opec member's biggest oil field resumed pumping, a person familiar with the matter who asked not to be identified said.
Opec Secretary-General Mohammad Barkindo said Sunday that he is "cautiously optimistic that the market is already rebalancing," while data on Friday showed the number of active oil rigs in the US rose to the highest since September 2015.
Mr Barkindo's comments support the Organization of Petroleum Exporting Countries' commitment to drain swollen inventories before the group meets May 25 in Vienna.
Kuwait and other producers from the group joined with non-member Oman to voice support for an extension of the six-month deal to cut output that began in January. The effects of the curbs have been mitigated by a surge in US supply and production.
"The rebound of Libyan production stalled the rally," Gene McGillian, manager of market research for Tradition Energy in Stamford, Connecticut, said by telephone.
"We were rallying on the signs that the Opec production agreement will be extended."
West Texas Intermediate for May delivery slipped 3 US cents to US$50.57 a barrel at 10.34am on the New York Mercantile Exchange. Prices gained US$2.63 last week to settle at US$50.60. Total volume traded was about 41 per cent below the 100-day average.
Brent for June settlement slipped one US cent to US$53.52 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a US$2.48 premium to June WTI.
Libya's output had dropped to about 500,000 barrels a day last week when production was halted at the Sharara field. Libya has sought to boost crude exports after fighting among rival militias hobbled oil production following the overthrow in 2011 of Moammar Al Qaddafi.
Rigs targeting crude in the US increased for an 11th week to 662, the longest run of gains since 2011, according to data from Baker Hughes. American oil production expanded for a sixth week to 9.15 million barrels a day in the week ended on March 24, the highest level since February 2016, according to Energy Information Administration data.