TOKYO May 10 Oil futures rose in Asian trading
on Wednesday after Reuters reported that Saudi Arabia would cut
supplies to the region as OPEC battles against rising U.S.
production that is threatening to derail its attempts to end a
sustained global glut in crude.
State-owned Saudi Aramco will reduce oil supplies to Asian
customers by about 7 million barrels in June, a source told
Reuters, as part of OPEC's agreement to reduce production and as
it trims exports to meet rising domestic demand for power during
Seven million barrels is roughly two days worth of oil
imports into Japan, the world's fourth biggest importer. Aramco
had previously been maintaining supplies to its important Asian
Global benchmark Brent futures were up 25 cents, or
0.5 percent, at $48.98 a barrel at 0028 GMT. On Tuesday they
fell 1.2 percent.
U.S. West Texas Intermediate crude was up 29 cents,
or 0.6 percent, at $46.17 a barrel.
It also fell 1.2 percent the previous session and the
closing price for both contracts on Tuesday was the second
lowest since Nov. 29, the day before the Organization of the
Petroleum Exporting Countries (OPEC) agreed to cut production
during the first half of 2017.
While prices surged immediately after the agreement, in
recent weeks they have come under sustained pressure as U.S.
production has ramped up.
Many are now pushing back the expected timing when the oil
market will come into balance after prices began slumping nearly
three years ago.
Saudi Arabia's oil minister Khalid al-Falih said on Monday
that he expected the output deal to be extended to the end of
the year or possibly longer. OPEC meets later this month.
Higher crude output from the United States should limit any
upside to global oil prices through the end of 2018, the U.S.
government said on Tuesday.
U.S. crude production is expected to rise by more than
previously expected in 2017 to 9.31 million barrels per day from
8.87 million bpd in 2016, a 440,000 bpd increase, the U.S.
Energy Information Administration said.
(Reporting by Aaron Sheldrick; Editing by Joseph Radford)