Libya adds to OPEC's burden with output at highest since 2014

Even though OPEC has stuck to its pledge to cut production, U.S. output has risen by more than 10 per cent since mid-2016 to 9.3 million barrels per day in 2017 and a forecast all-time annual high of nearly 10 million barrels in 2018, boosted by the shale sector and near the output of Russian Federation and Saudi Arabia.

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.

Following the release, West Texas Intermediate, the U.S. crude marker, was up 2.5 per cent to $47.03 barrel, while Brent crude, the global oil benchmark, rose 2.4 per cent to $49.90 a barrel.

US West Texas Intermediate (WTI) crude oil futures were trading at $46.40 per barrel, down from an intra-day high of $46.66 and also little changed from their last settlement.

Crude oil prices drifted lower on Tuesday as investors continued to express concerns over slowing demand and the rise in US crude output.

Japan, the world's fourth biggest importer, consumes 7 million barrels roughly two days and Aramco had been keeping supplies to its major Asian customers previously.

"As a result, United States crude oil production surpassed 9 mb/d in February 2017, about 0.5 mb/d higher than the low seen in September 2016".

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"We need to see the OPEC/non-OPEC deal extended to 2018, otherwise there's a risk oil prices will fall below US$40", Alexandre Andlauer, an analyst at AlphaValue SAS in Paris, said by email.

U.S. bank Goldman Sachs said that USA shale drillers "fundamentally changed" the oil industry due to their ability to ramp up output much faster than conventional producers.

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.

Global benchmark Brent crude was up 54 cents at $49.27 a barrel by 1102 GMT.

A third Asian refiner is getting contracted volumes for June, steady from the previous month, a separate industry source said.

Crude oil prices edged lower early Tuesday with bearish sentiments becoming entrenched as trends outside an OPEC-led balance effort add to supply-side concerns.

Nigeria, which along with Libya is exempt from OPEC cuts, is also expected to see a jump in output soon as Shell tests the Trans Forcados oil export pipeline before it restarts.

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