Oil shot up on Tuesday, July 18, as demand soaked up some of the surplus supplies from OPEC and the United States, however, traders said the market was trading in a tight range and showed few signs of big short term moves.
Benchmark Brent crude LCOc1 was up 70 cents at $49.12 a barrel by 1150 GMT, while U.S. light crude oil CLc1 was 65 cents higher at $46.67.
In a sign of strong demand, data on Monday showed refineries in China increased crude throughput in June to the second highest on record.
But many markets are well supplied and oil for prompt delivery is trading at heavy discounts to forward futures in several parts of the world. As a result, crude oil prices are trading at only around half the levels seen three years ago.
A deal by the Organization of the Petroleum Exporting Countries with Russia and other non-OPEC producers to cut supplies by around 1.8 million barrels per day (bpd) between January this year and March 2018 has so far failed to tighten the market or push up prices.
Although many OPEC countries have restricted production, others including Nigeria and Libya have been allowed to increase output.
Ecuador, a small producer within OPEC, said on Tuesday it was not cutting its production by 26,000 bpd as agreed due to the country’s fiscal deficit.
Oil Minister Carlos Perez said Ecuador was cutting only 60 percent of that figure, putting current output at 545,000 bpd.
The U.S. Energy Department said in a report U.S. shale oil output was likely to rise for the eighth consecutive month in August, climbing 112,000 bpd to 5.585 million bpd, Reuters reports.
