Futures in New York were holding losses after dropping 0.7 percent on Monday, following a 5.5 percent jump last week. While OPEC output fell by 200,000 barrels a day in March, the decline was helped by cuts in Nigeria and Libya that are exempt from its production-curb deal to shrink a global glut, a Bloomberg News survey shows. Libya was said to resume pumping at its biggest field after about a week of disruption that had helped boost prices.
Oil’s climb last week, its most since December, was also aided after Kuwait and other producers from the Organization of Petroleum Exporting Countries joined with Oman to voice support for an extension of the six-month deal to reduce output that began in January. OPEC Secretary-General Mohammad Barkindo said Sunday that he is “cautiously optimistic that the market is already rebalancing,” even as data showed the number of active oil rigs in the U.S. rose to the highest since September 2015.
“Oil will continue to remain vulnerable as Libyan production recovery is expected to increase downward pressure on prices,” said Will Yun, a commodities analyst at Hyundai Futures Corp. “For oil to climb further, it will need more definite comments from either Saudi Arabia or Russia about extending the output deal beyond six months.”
West Texas Intermediate for May delivery was unchanged at $50.24 a barrel on the New York Mercantile Exchange at 10:17 a.m. in Singapore. Prices slipped 36 cents to close at $50.24 on Monday. Total volume traded was about 74 percent below the 100-day average.
Brent for June settlement was down 1 cent at $53.11 a barrel on the London-based ICE Futures Europe exchange, after falling 0.8 percent on Monday. The global benchmark crude traded at a $2.39 premium to June WTI.
Libya’s crude production rebounded to about 660,000 barrels a day as the OPEC nation’s biggest oil field resumed output, according to a person familiar with the matter. The nation’s output had dropped to about 500,000 barrels a day last week when production was halted at the Sharara field.
OPEC pumped 32.095 million barrels a day last month, based on information compiled from analysts, oil companies and ship-tracking data. Among the 10 members bound by production caps, compliance weakened to 89 percent of pledged reductions from 104 percent. As well as Nigeria and Libya, Saudi Arabia buoyed the group’s effort by cutting its own output by more than it agreed late last year.