Nigeria has no timeframe to join OPEC production cuts - oil minister

Nigeria has no timeframe to join OPEC production cuts - oil minister

Nigeria has no timeframe to join OPEC production cuts - oil minister

U.S. crude production been growing steadily, topping more than 9 million barrels a day in February, according to the U.S. Energy Information Administration.

Investors will be watching for changes in global crude inventories levels and production, two data points that will be featured in the Organization of the Petroleum Exporting Countries' monthly report due later Wednesday.

"Given that the market is now out of patience for large stock draws and increasingly concerned about next year's balances, we believe that price upside will need to be front-end driven, coming from observable near-term physical tightness and signs of a USA shale activity slowdown on a sustained basis in coming weeks", Goldman Sachs analysts wrote in a note.

The expectation for lower prices will drag on USA oil production in 2018, according to EIA.

The oil cartel and USA shale producers began dialogue earlier in March this year.

Oil futures were little changed in NY, trading near $44 a barrel following a report that Saudi Arabia exceeded its agreed-upon output limits last month.

U.S. WTI futures were trading at $45.71 per barrel as of 12:51 p.m. GMT and Brent crude futures were at $48.10 per barrel.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories fell by 8.13 million barrels in the week ending July 7. In addition, market patience is wearing thin, with global inventories still higher than the five-year average, pointing to the fact that OPEC cuts have not effectively erased the glut as the cartel had expected. Estimates by S&P Global Platts put OPEC's June production up slightly from May at 32.49 million barrels.

The price gains come even as USA oil production has continued to increase.

"A revised oil price forecast that is $2 to $4 per barrel lower for late 2017 and during 2018 than the prior forecast will make it less profitable for some USA producers to drill for oil", he said.

Before EIA released the storage report, Brent was up 1.9% and U.S. was up 2.4%. Production declined and major oil producers were forced to scale back investment.

Following the surge, OPEC is mulling the idea of calling on Nigeria and Libya to reduce oil output, in line with the oil cut deal reached by member and non-member states at its last meeting in Vienna, Austria. Total motor gasoline supplied (the agency's proxy for demand) averaged over 9.7 million barrels a day for the past four weeks, down by 0.3% compared with the same period a year ago.

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