DEMAND WILL UP
BOE - Oil advanced after drillers in the U.S. slowed an expansion and Saudi Arabia's energy minister predicted demand will pick up in the summer.
Futures added 0.4 percent in New York after losing 3 percent last week. Rigs targeting crude in the U.S. fell for the first time in 11 weeks, according to data from Baker Hughes Inc. OPEC probably won't need to extend output cuts beyond the agreed six-month term given the level of compliance with the reductions and the outlook for an increase in global consumption, Saudi Minister of Energy and Industry Khalid Al-Falih said.
"Based on my judgment today, I think it's unlikely that we will need to continue" the output cuts beyond June because the market will have re-balanced, Al-Falih told reporters in Abu Dhabi. Even so, OPEC will reassess the situation when it meets again in May and "all players have indicated their willingness to extend, if necessary."
U.S. oil has advanced since the deal between the Organization of Petroleum Exporting Countries and 11 other nations to trim supply, but was unable to sustain its rally above $55 amid concern that rising prices would spur more production. While Middle East producers have signaled they're sticking to the pledged reductions, the U.S. recently raised this year's output forecast.
West Texas Intermediate for February delivery was at $52.62 a barrel on the New York Mercantile Exchange, up 25 cents, at 10:25 a.m. in London. Total volume traded was about 40 percent below the 100-day average Monday, which is a public holiday in the U.S. The contract lost 64 cents to $52.37 a barrel on Friday.
Brent for March settlement rose 27 cents to $55.72 a barrel on the London-based ICE Futures Europe exchange. The contract fell 56 cents, or 1 percent, to $55.45 a barrel on Friday. Prices slid 2.9 percent last week, the biggest drop since November. The global benchmark crude traded at a premium of $2.32 to March WTI.
The U.S. rig count declined by seven to 522, according to data published Friday. Prior to the drop last week, drillers had added more than 200 rigs from a low in May to the most machines in a year.
"The U.S. oil rig count by Baker Hughes has been muted at the start of the year," said Bjarne Schieldrop, chief commodities analyst at SEB AB bank in Oslo.
- Colder weather in Siberia contributed about 5,000 to 10,000 barrels a day to Russia's total crude-production decrease this month, Deputy Energy Minister Kirill Molodtsov told reporters on Friday.
- Iran won't renegotiate the nuclear deal with president-elect Donald Trump, Iranian Deputy Foreign Minister Abbas Araghchi said in Tehran.
- Nigeria told OPEC its December crude output rose by about 400,000 barrels a day 1.94 million, according to two people with knowledge of the matter.
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