OIL PRICES: ABOVE $56
REUTERS, BLOOMBERG - Brent oil extended gains into an eighth straight session on Wednesday, having recovered nearly all last month's losses, after Saudi Arabia was said to be pushing its fellow OPEC members and some rivals to prolong supply cuts beyond June.
International benchmark Brent crude futures were up 33 cents by 0900 GMT at $56.56 a barrel, their highest since early March. If the day's gains hold, it will be the longest winning streak for Brent since February 2012.
U.S. West Texas Intermediate (WTI) crude futures were up 26 cents at $53.66 a barrel, on track for a seventh straight session of gains.
Saudi Arabia, de-facto leader of the Organization of the Petroleum Exporting Countries, has told other producers that it wants to extend a coordinated production cut beyond the first half of the year, the Wall Street Journal reported.
"Given yesterday's developments in the oil market it is rather surprising to have seen limited price gains across the board," PVM Oil Associates analyst Tamas Varga said.
"Maybe the weekly EIA data ... made buyers cautious and as a result WTI settled only 32 cents/bbl higher at $53.40/bbl and Brent 25 cents/bbl up at $56.23/bbl. Or maybe the sluggish stock market performance put a lid on yesterday's price strength but we should not be surprised to see the oil market make amends today."
OPEC and other producers, including Russia, have pledged to cut output by around 1.8 million barrels per day (bpd) during the first half of 2017 to rein in oversupply.
Saudi Arabia has cut more than it pledged, which has helped compensate for less stringent compliance by other signatories to the deal. Its output has fallen 4.5 percent since late 2016.
"(The) Saudi Arabian production reduction appears to be ahead of forecast and gave oil a boost," said Jeffrey Halley of futures brokerage OANDA in Singapore.
Fearing a loss of market share, Saudi Arabia is shielding its most important customers in Asia from the cuts, continuing to supply them with all contractual volumes.
In the United States, production and inventories are surging.
The government's Energy Information Administration (EIA) said on Tuesday U.S. 2018 crude output would rise to 9.9 million bpd, from 9.22 million bpd this year.
With demand expected to rise by 340,000 bpd in 2018, that would leave increasing amounts of U.S. oil for export or storage.
U.S. crude inventories hit a record 535.5 million barrels this month.
Official U.S. production and inventory data will be published later on Wednesday by the EIA.
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