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OPEC Plans To Extend Limits

10 May 2017

West Texas Intermediate for June delivery rose 21 United States cents to US$46.43 a barrel before Mr Falih's comments, and traded little changed at US$46.20 at 10.16am in London yesterday.

The slide had worsened after OPEC delegates downplayed the chance that their group and other producing countries would deepen their output cuts when they meet on May 25.

Countering those efforts, US drillers added oil rigs for a 16th week in a row last week, extending a drilling recovery into a 12th month, energy services firm Baker Hughes Inc said on Friday.

On the physical markets, barrels of North Sea crude changed hands at their lowest levels since late 2015 yesterday.

When the OPEC deal was reached late a year ago, Libyan oil production stood at about 600,000 bpd. As per the article published on Bloomberg, U.S. crude built has also been retreating for the past four weeks from record levels seen at the end of March.

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"The market is getting exhausted of hearing from OPEC how good they are, how compliant (with supply curbs) they are and especially how all their projections for inventories falling seemed to be moved into the future", said Eugen Weinberg, head of commodity research at Commerzbank.

The producers have been frustrated by the fact the process is slow and complicated and does not show up right away in the most visible data, such as U.S. inventory.

Oil prices gave up early gains on Monday, as the market weighed news from OPEC and other producers about prolonging output cuts against data showing the recovery in USA drilling had extended for a year.

The producer coalition is determined to do "whatever it takes to achieve our targets and bringing stock levels back to the five-year average".

Saudi Arabia and Russian Federation, in response to the surge in USA shale production, have signalled they intend to continue to extend the deal reached to cut production by 1.8 million barrels per day in November.

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Brent crude, the benchmark for more than half the world's oil, is projected to average $52.60 this year, a decrease from the prior estimate of $54.23.

However, many analysts only see an overbundance of talk from OPEC members, as opposed to action regarding stockpiles. They profit when they buy cheap after having sold the borrowed securities at higher prices.

New York's NYMEХ (New York Merchantile Exchange) is a USA futures market founded in 1882.

Saudi Arabia will reduce its crude oil exports to the Asian market by around 7 million barrels in June, Reuters reported on Tuesday, citing a source with first-hand knowledge of the matter.

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