* Saudi Arabia says will "do whatever it takes" to balance
* Production cut extension into 2018 seen as possible
* Relentless rise in U.S. oil output undermines OPEC-led
* Slowdown in demand-growth in early 2017 also weighs on
By Henning Gloystein
SINGAPORE, May 9 Oil prices edged up on Tuesday,
driven by anticipation that an OPEC-led pledge to cut production
would be extended beyond the first half of the year and into
2018, although overall high supply still weighed on markets.
Brent crude futures, the international benchmark for
oil prices, were at $49.60 per barrel at 0045 GMT on Tuesday, up
26 cents, or 0.5 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude oil futures
were trading at $46.66 per barrel, up 23 cents, or 0.5 percent
from the day before.
The higher prices were a result of top exporter and de facto
OPEC leader Saudi Arabia saying on Monday it would "do whatever
it takes" to rebalance a market that has been dogged by
oversupply for over two years, resulting in crude prices below
$50 per barrel.
A cornerstone of the Saudi promise to rebalance the market
would be to extend, potentially into 2018, a pledge led by the
Petroleum Exporting Countries (OPEC) and other producers
including Russia to cut output by almost 1.8 million barrels per
day (bpd) during the first half of the year.
"Soothing words from Saudi Arabia about extending the
production cut deal, possibly into 2018, supported prices," said
Jeffrey Halley, senior market analyst at futures brokerage OANDA
Despite these statements from Saudi Arabia, crude prices
remain near levels seen before OPEC announced its plans to cut
late last year.
OPEC's efforts to tighten the market and prop up prices have
been undermined by a relentless rise in U.S. production,
especially from shale oil drillers.
U.S. crude production C-OUT-T-EIA has risen by over 10
percent since mid-2016 to 9.3 million bpd, close to the output
of top producers Russia and Saudi Arabia.
Bank of America Merrill Lynch said this was also due to a
slowdown in oil demand.
"But oil demand growth this year is underwhelming, in part
explaining why crude oil prices and refining margins have sold
off sharply recently," the bank said in a note to clients.
However, it added that "demand should recover somewhat soon
as some negative factors, such as the demonetization in India or
the sharp recessions in Brazil and Russia, are receding".
(Reporting by Henning Gloystein; Editing by Joseph Radford)