Oil prices slipped on Tuesday, pulling back from recent gains as exports from key OPEC producers rose and despite news of lower crude shipments from Saudi Arabia.
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The oil market has been in consolidation mode after a sharp rally between mid-June and late July pushed U.S. crude futures above $50 a barrel for the first time in several weeks. The price slipped back below $50 and has traded around that number as world supply has been slow to draw down.
"It's just unable to break above $50," said Kyle Cooper, consultant for ION Energy in Houston. "It's boring, but there's a fundamental justification for prices being stuck between $45 and $55 without a significant geopolitical event."
Benchmark Brent crude LCOc1 settled down 23 cents a barrel at $52.14 a barrel. U.S. light crude CLc1 ended down 22 cents at $49.17 a barrel.
Crude oil exports from the Organization of the Petroleum Exporting Countries hit a record in July, largely because of gains in Nigeria and Libya, two member countries exempt from the agreement to limit production through March 2018.
The recovery in Libya's oil output and higher production in Nigeria have complicated OPEC's efforts to curb supply.
Officials from a joint OPEC and non-OPEC technical committee said on Tuesday that they on expect greater adherence to the pact to cut 1.8 million bpd in production.
Saudi state oil company Aramco will cut allocations to its customers worldwide in September by at least 520,000 barrels per day (bpd), sources familiar with the matter told Reuters on Tuesday.
Oil production remains high in many parts of the world and fuel prices are around half what they were in 2011-2014. Many U.S. shale drillers, in reporting second quarter earnings, highlighted efforts to improve drilling efficiencies to boost profits, but largely expect to keep pumping oil.
"Everything on the (earnings) calls out of Q2 are highlighting efficiency gains, keeping capital restraint, but yet they still have production growth," said Cooper.
Later on Tuesday afternoon, industry group the American Petroleum Institute will release its figures on U.S. oil inventories. The U.S. Energy Information Administration will release its weekly petroleum status report at 10:30 a.m. ET (1430 GMT) on Wednesday.
U.S. crude inventories last week were expected to have declined for a sixth straight week, while refined product stockpiles probably fell too, an extended Reuters poll showed. [EIA/S]
Additional reporting by Christopher Johnson in London, Henning Gloystein in Singapore and Aaron Sheldrick in Tokyo; Edited by Steve Orlofsky, David Gregorio and Frances Kerry