Crude futures settle higher as Saudi oil chief pledges export cuts

Last week OPEC said its crude oil production averaged 32.61 million bpd in June

Oil rallied on Monday, erasing early losses after leading OPEC producer Saudi Arabia pledged to cut its exports to help speed up the rebalancing of global supply and demand. European Brent oil added 0.27 cents to reach USD48.33 per barrel, while West Texas Intermediate inched up 0.21 cents to USD45.98. Brent, the global benchmark, rose 63 cents, or 1.31%, to $48.69 a barrel on ICE Futures Europe. Russian Federation has reduced output by 300,000 barrels a day since October, in line with its agreement to cut production. The North American benchmark WTI is now trading at $45.8 per barrel and Brent at $2.3 per barrel premium to WTI.

Alongside Saudi Arabia and non-Opec Russia, the committee includes Kuwait, Venezuela and Algeria - all Opec members, and Oman, another non-Opec participant.

He said the market had faced pressure in recent weeks due to weaker OPEC compliance with cuts and rising production from Libya and Nigeria, which have been exempt from the reductions.

Libya says it targets OPEC and has removed 350 million barrels of oil a day according to Dow Jones and the Saudi oil minister says he knows the market sentiment is bearish but he is up for the challenge to change that perception.

OPEC sources told Reuters on Saturday that Nigeria could cap output if it managed to sustain production at 1.8 million bpd for 90 days.

Nigeria was ready to cap or even reduce supply if it can maintain output of 1.8-million barrels a day, said the two people, asking not to be identified because the information is confidential.

"The only significant thing about the meeting is that Nigeria has voluntarily agreed that they will not increase their production above 1.8 [million barrels a day] once they have achieved that level", said Naeem Aslam, chief market analyst at ThinkMarkets U.K.

Saudi Arabia's efforts to shore up global oil prices ahead of the planned listing of Saudi Aramco was met with a shrug from the markets as traders kept their eyes on U.S. shale. On Monday in St. Petersburg, OPEC Secretary-General Mohammad Barkindo said OPEC was in agreement to study "other parameters".

Mr. Falih's focus on exports was new.

In June, OPEC members' compliance with their agreed cuts fell to its lowest level since the deal came into effect (although 95 percent is still pretty good).

Marzouq, whose country heads the joint ministerial committee, said attendees would discuss continuing the production cuts.

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