OPEC sees much higher oil supply from rivals in 2017

A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie Oklahoma

A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie Oklahoma

This occurred as refinery activity eased from recent elevated levels and oil imports dropped by 644,000 barrels a day.

Saudi Arabia's energy minister, Khalid al-Falih, said on Monday he expected Opec to agree to extend an agreement to limit oil production to the end of the year or possibly longer.

Mounting fears of continued oversupply last week caused oil prices to fall to levels not seen since November, before the Opec deal.

Currently, OPEC is planning to extend the tenure of this oil curb to the year-end or to next year. The twelve member states will be joined by Russian Federation, but U.S. production remains a concern. US light crude oil was up 68 cents at $48.01.

Global benchmark Brent crude was up $1.81 at $50.54 a barrel by 1:51 p.m. Inventories dropped by 5.79 million barrels last week, the American Petroleum Institute was said to report.

Even though OPEC has stuck to its pledge to cut production, US output has risen by more than 10 percent since mid-2016 to 9.3 million barrels per day, close to the output of Russian Federation and Saudi Arabia.

In the United States, crude stockpiles posted their biggest weekly drawdown since December last week as imports dropped sharply, while inventories of refined products also fell.

The decline in gasoline inventories and an increase in U.S. demand registered for the latest week also helped underpin expectations that demand conditions would hold firm and provide net support to the market.

After talks, the buyer avoided a cut in June because of an earlier request for extra supplies, the source said.

But probably to bring back confidence in the oil market, Saudi Arabia and Russian Federation - the two pillars of OPEC and non-OPEC oil producers - hinted at an extension of output cuts in 2018.

Inventories of U.S. crude fell by 5.25m barrels in the week ended May 5, according to the Energy Information Administration.

Crude production rose to 9.31 million...

OPEC meets later this month. Elsewhere, European economists said global growth, not counting the European Union, would strengthen to 3.7 percent this year and the region as a whole was on the road to recovery.

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, ahead of a meeting of major oil producers later this month to discuss extending supply cuts.

Further, the EIA upgraded its crude oil estimate to an average of 9.3 million barrels per day (bpd) in 2017 and 10 million bpd in 2018.

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