Brent crude LCOc1 was up 12 cents at $52.63 at 0006 GMT, after settling up half a percent on Thursday. USA oil futures on the NYMEX gained 6 percent in the five trading sessions ended May 16, boosted by expectations that the major oil producing nations will extend their cuts further, even into 2018.
Overall oil supplies remain ample, with large amounts of crude from the United States and other producers being shipped to the big consumer regions in northern Asia, undermining the OPEC-led efforts to tighten the market.
But market watchers are growing more confident that OPEC, Russia and other big producers will extend cuts of nearly 1.8 million barrels per day (bpd) until the end of March 2018. An OPEC panel is also considering deepening the cuts to help boost prices.
A surplus of USA supply has led to large volumes of crude being exported from the United States to northern Asia, undermining the OPEC-led efforts to tighten the market. Energy services firm Baker Hughes said USA drillers added oil rigs for an 18th week in a row, the second-longest streak of weekly additions on record. Both benchmarks slipped back from session highs after a report that USA energy companies added oil rigs again in the latest week. US producers are not party to any agreements capping production.
Shipping data in Thomson Reuters Eikon shows that USA crude exports to Asia have soared from a handful of tankers a quarter throughout 2015 and 2016 to 10 tankers in the first quarter of 2017 and that figure is expected to rise.
U.S. President Donald Trump will arrive on Saturday in Saudi Arabia, where state oil company Saudi Aramco is set to sign investment deals with several U.S. companies. In a note on Friday, Commerzbank wrote that if President Hassan Rouhani remains in office, it should encourage Western investment and bring “a noticeable rise in Iranian oil production”.
On Friday the U.S. Commodity Futures Trading Commission said money managers cut their net long U.S. crude futures and options positions in the week to May 16 to their lowest level since November.
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