Oil Rises as Saudi Arabia Pledges Deep Cut to August Exports

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Saudi Arabia vowed to cut its August oil exports by almost 1 million barrels per day, the latest move by OPEC to reduce a global oversupply and boost oil prices.

Opec has agreed with several non-Opec producers led by Russian Federation to cut oil output by a combined 1.8 million barrels per day (bpd) from January 2017 until the end of March 2018. Libyan production this month will probably exceed 1 million barrels a day, nearly twice April's level. Prices lost 1.7 percent last week. US oil drillers cut one rig in the week to July 21, according to data from Baker Hughes. BP (BP) fell 0.8%, ws Chevron (CVX) was flat, and Royal Dutch Shell (RDSA) was also unchanged.

World oil prices are rising on July 24, amid hopes for a decision to include Nigeria and Libya in a production-cap deal orchestrated by the OPEC.

"Saudi Arabia is finally slashing exports to the United States, even as shipments to other destinations - with less visible inventories - have been maintained, or even risen", said Julian Lee, an oil strategist for Bloomberg First Word.

In December 2016, OPEC and a number of countries outside the cartel agreed to withdraw 1.8 million barrels per day from the oil market in the first half of 2017.

In a statement following the meeting, the countries in the monitoring committee said "the oil market is making steady and significant progress towards rebalancing" after being hit by a vast glut in recent years.

Nigeria has agreed to limit its production to 1.8 million barrels a day, OPEC officials said.

Libya's oil production has reached 1.069 million barrels per day, a Libyan oil source told Reuters, above a high reached earlier this month.

Nigeria's foreign reserves has increased to $30.5 billion due to rise in global oil prices. The production has increased by more than a million barrels per day since bottoming around last July. Some countries continue to lag [on compliance with cuts] which is a concern we must address head on.

Mr. Falih's focus on exports was new.

So even with OPEC cutting production, it was still sending roughly the same amount of oil into the global market in June as it was in October, the month used as the baseline level for the production deal. "Exports have now become the key matrix to financial markets and we need to find a way to reconcile credible exports data with production data".

Oil Minister, Ibe Kachikwu, had said that the country was deliberating on whether to join the OPEC cuts and how soon it could.

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