Futures in London were little changed after gaining 0.3 percent Monday. The deal to extend output limits through March was initially met with a selloff as deeper cuts or a plan for the rest of 2018 weren’t proposed. Saudi Arabia’s Energy Minister Khalid Al-Falih said the strategy is working and stockpiles will drop faster in the third quarter.
U.S. inventories have fallen for seven straight weeks in a sign the production limits may be working, though stockpiles are still above the five-year average. Saudi Arabia plans to reduce exports to the world’s biggest consumer to speed up that decline.
“The current surplus is not deep enough to send Brent back to $48 or $43,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “We expect the price to move back to the $55 region.”
Brent for July settlement lost 21 cents, or 0.4 percent, to $52.08 a barrel on the London-based ICE Futures Europe exchange as of 3:58 p.m. Tokyo time. Prices on Monday rose 14 cents to $52.29. The global benchmark traded at a premium of $2.32 to WTI.
West Texas Intermediate for July delivery slipped 2 cents to $49.78 a barrel on the New York Mercantile Exchange. There was no settlement Monday because of the U.S. Memorial Day holiday.
- Libya’s oil output has fallen by 750 barrels a day after Arabian Gulf Oil Co., a unit of National Oil Corp. known as Agoco, cut output, according to person with direct knowledge of the matter.
- SK Innovation Co. will continue to seek growth opportunities in N. America’s unconventional oil, although profits dropped from crude exploration and production operations due to low oil prices, co. says in an emailed statement.