NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled mixed with an upside bias Monday, with the West Texas Intermediate crude and ULSD contracts ending higher with support from an agreement to cap Nigerian output and a Saudi Arabian plan to limit its crude oil exports.
After a meeting by the Joint Ministerial Monitoring Committee of the Organization of the Petroleum Exporting Countries and non-OPEC producers ended Monday in St. Petersburg, Russia, Saudi Arabian energy minister Khalid al-Falih said the kingdom would limit its crude oil exports in August to 6.6 million bpd, almost 1.0 million bpd below the comparable level a year ago.
He said it was “only a matter of time before inventories return toward more normal levels.”
OPEC also issued a statement saying that Nigeria has agreed to join their production agreement and would limit its output to 1.8 million bpd once reached.
Nigeria and Libya were exempt from the agreement to cut 1.8 million bpd in production by OPEC and 10 non-OPEC producers. The production quota scheme was implemented on Jan. 1, and extended nine months in May to run through March 2018.
In its Monthly Oil Market Report for July, OPEC said Nigeria reported producing 1.66 million bpd of crude oil in June, up 168,000 bpd from May, while secondary sources reported Nigerian production at 1.733 million bpd.
In its statement on Monday, OPEC said they achieved a 98% compliance rate in June. The statement added that during the first half of 2017, OPEC and their non-OPEC allies “adjusted their production downwards by an estimated volume of 351 million bpd.”
The statement hinted at a possible extension of the OPEC-led production cuts beyond March 2018 should that become necessary.
For now, oil demand is picking up, the statement said, and added that a crude supply overhang collectively held by the 35 countries that make up the Organization for Economic Cooperation and Development has narrowed by 90,000 bbl to 250 million bbl above their five-year average.
The September NYMEX WTI futures contract settled 57cts higher at $46.34 bbl, after reversing off a better than one-week spot low of $45.40. The September Brent crude futures on the IntercontinentalExchange settled 54cts higher at $48.60 bbl.
The NYMEX August ULSD futures contract edged up 0.17cts to a $1.5169 gallon settlement and August RBOB futures eased 0.65cts to $1.5568 gallon at settlement.
George Orwel can be reached at email@example.com
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