Oil futures rose at the start of the week in Asian trade, rebounding from declines on Friday amid a stronger U.S. dollar and persistent oversupply worries.
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Late last week, oil reversed much of the gains seen during the two-week rally from late June, as global oil output remained robust though demand was flat, leaving inventories near historical highs. Friday's near 3% decline also came as the dollar surged after better-than-expected U.S. nonfarm payrolls data.
"Friday's selloff in oil was a bit overdone," says Ric Spooner, chief markets analyst for CMC markets.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August recently traded up 0.8% at $44.57 a barrel in the Globex electronic session. September Brent, on London's ICE Futures exchange, rose 0.8% to $47.07.
The Organization of Petroleum Exporting Countries is considering putting a cap on how much oil members Nigeria and Libya can pump, cartel delegates say. Due to their internal political unrest, the two countries have been exempt from OPEC's production cut deal, which has been extended through to next March.
Libya's crude-oil output has surged to more than one million barrels a day, up from 400,000 in October, while Nigeria's output has risen to 1.6 million barrels a day, up from 200,000 barrels a day in October, according to JBC, a Vienna-based energy-industry consultancy.
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Still, the main point of concern for investors is rising U.S. production. Data from the U.S. Energy Information Administration showed U.S. production increasing to nearly 9.34 million barrels a day last week, up from 9.25 million barrels a day the week prior. Production was up nearly 11% from a year ago and nearly back at its 10-month high.
Friday's updated rig count from Baker Hughes Inc. also point to production increases. Oil producers added seven more rigs to their working fleet, rising to 763, up more than double from the 351 at work a year ago.
"In the short term, oil prices may remain under pressure because of the U.S. glut in supplies. But the medium term is looking much better because I expect market rebalancing will kick in by late 2017 or early 2018," said Gananasekar Thiagarajan, director of Commtrendz Risk Management.
Refined-product prices were also broadly higher on Monday. August Nymex reformulated gasoline blendstock rose 0.3% to $1.5036 cents a gallon, diesel was up 1.8% to $1.46 and ICE gasoil climbed 0.6% at $430.25 a metric ton.
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(END) Dow Jones Newswires
July 10, 2017 01:11 ET (05:11 GMT)