Oil prices jolted slightly on Tuesday, June 13, after Saudi Arabia said it would make significant export cuts in July amid signs of a drawdown in U.S. crude inventories, though increasing U.S. output continues to weigh on the market.
Brent crude futures LCOc1 were at $48.64 per barrel at 0833 GMT, up 35 cents, while benchmark U.S. crude CLc1 was at $46.38 per barrel, up 30 cents.
Saudi Arabia, the world’s top exporter, is leading an effort by the Organization of the Petroleum Exporting Countries, Russia and other producers to cut output by almost 1.8 million barrels per day (bpd) through March 2018 to prop up prices.
During the first half of the year, there were doubts over OPEC’s compliance with its own pledges.
Saudi officials now say they are making real cuts, including 300,000 bpd to Asia for July, although several Asian refiners said they were receiving their full allocation.
OPEC’s exports have been falling since the start of the cuts in January, although some members such as Libya and Nigeria are exempt and doubts remain over the compliance of others, including Iraq.
Trade data shows OPEC shipments to customers averaged around 26 million bpd in the last six months of 2016, while they are set to average around 25.3 million bpd in the first half of this year, Reuters reports.
Crude has lost 10 percent of its value since late May, when OPEC announced it would extend production cuts.
